Margaret Beckett: I am grateful to the right hon. Gentleman for making those points. In some ways he is right about the situation being dreadful and deteriorating, but in some ways it is not quite so bad, in that there is less fighting than there has been. What are particularly dreadful, and must cease, are attacks by the Government themselves, including in the past few weeks attacks on groups who had just agreed a ceasefire with the African Union commanders. That is a chaotic and ridiculous situation. The right hon. Gentleman is right to highlight the implications for the humanitarian effort. I am sorry to tell the House that there are probably fewer aid workers in Darfur now—for wholly understandable reasons; those are very brave people, who go into all sorts of horrendous situations—than for about two years, although there remain quite a number of food stocks. I know that the right hon. Gentleman he is aware that we have tried to do everything we can to work with the humanitarian organisations, by helping to organise protected routes and so on. As I mentioned, the UN envoy was in Sudan only a few days ago. The right hon. Gentleman is right to highlight the fact that there is quite a small window of opportunity for the Government of Sudan to show that this time they are sincere in being willing to move forward with the UN and the African Union. If they are not able to do so, consideration of what action the international community can take, such as sanctions, will have to come to the fore again, which is not what anybody wants.

Margaret Beckett: I agree with the hon. Gentleman's opening remarks. Yes, of course there is a danger, but it has existed for quite some time. One reason for sharing his wish for speedy action to move into and support the Government in Somalia is that it is perhaps less of a risk now than it has been for a considerable time. We are very anxious to secure a force that has sufficient strength and the right kind of mandate. On dialogue with the international community, as it happens I was discussing the matter only this morning with the President of Tanzania. Our officials were heavily engaged in the international contact group and played a key role in trying to help broker and reach agreement. I therefore assure the hon. Gentleman that we are conscious of the need for speed as well as effectiveness, and we will do everything that we can. No one wants a security vacuum in Somalia, not least because of the dangers to which he and I referred of extremist elements there.

Mrs. Linda Riordan, supported by John McDonnell, Jeremy Corbyn, Ms Katy Clark, Mrs. Ann Cryer and Dr. Gavin Strang, presented a Bill to make provision for the treatment of age-related macular degeneration; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 9 March, and to be printed. [Bill 45].

Hywel Williams: I beg to move,
	That leave be given to bring in a Bill to amend section 10 of the Juries Act 1974 to provide that in certain cases all members of a jury be bilingual in Welsh and English; and for connected purposes.
	The Bill's purpose is clear: to ensure that in respect of some Welsh cases, the jury is bilingual and able to understand the evidence directly, in Welsh or in English, rather than through a translator. To reassure some Members, I emphasise at the start that this provision would apply only to some cases, and not to all cases heard in Wales.
	I do not intend to argue today in favour of the principle of hearing evidence in the original language. That principle, I would contend, is already explicit in section 10 of the Juries Act 1974, which includes a requirement that jurors understand English and makes provision for their discharge if they do not. The question therefore is not whether we have a language condition for juries, but whether it is to remain an English-only condition or to be an English and Welsh condition in Wales. The answer is that it is important that both the content and quality of evidence be apprehended as clearly and fully as possible by juries. In cases where Welsh is used, juries should be able to understand Welsh, as well as English.
	Much has changed since the 1974 Act. With respect to the demography of the language, there are now more Welsh speakers, and there are more younger speakers than older speakers. The language is getting younger. Many Welsh speakers live outside the traditional heartland areas of the north and the west. Indeed, according to the 2001 census, 40 per cent. of Welsh speakers live in the south and the east, in Wrecsam, Cardiff, Newport and the valleys. That has profound significance both for the demand for the use of Welsh in the courts and for the ease with which random selection of bilingual juries outside the heartland areas might be achieved.
	Since the 1974 Act, the law on the Welsh language has changed. Historically Welsh was used in the courts both before and after the Acts of Union with the infamous clauses essentially banning the use of Welsh in the official domain. Given that most Welsh people up to the middle of the 19th century spoke only Welsh—they did not speak English—the use of Welsh in the courts was inevitable. Indeed, it was essential for the administration of justice. However, the clauses in the Acts of Union were in force until the position was clarified by the Welsh Courts Act 1942, which provided that Welsh might be used in some circumstances. That position was modified by the Welsh Language Act 1967 introduced by the then Labour Government, which established the principle of equal validity, which means that if something is done in Welsh it is as valid as if it were done in English. However, it also provided that when there was a discrepancy between a Welsh and English text, the English text would prevail. As was noted at the time, if it was said in Welsh that two and two was four and in English that it was five, it would be five. The situation was addressed again by the Welsh Language Act 1993, brought in by the then Conservative Government. The principle of that Act was that Welsh and English were to be treated on the basis of equality where that was reasonably practical and appropriate in the circumstances. And that is the current state of play in respect of the Welsh and English languages. In general and in the courts, Welsh and English are to be treated on the basis of equality.
	In respect of Welsh cases, a wide variety of cases, up to and including cases of murder, are heard in Welsh. Sometimes each member of the jury is wholly bilingual, sometimes not, and simultaneous translation is widely used. But even though the standard of English-Welsh simultaneous translation is high, I contend that hearing evidence in translation is not the same as hearing and understanding that evidence, with all its nuances, in the original language. After all, juries are often told to judge a witness not just by what they say, but by how they say it. Much is communicated by other means than directly through language. Needless to say, were this Bill to be enacted, simultaneous translation would still be available for others attending the courts.
	The point is that at present there is no guarantee that each member of the jury is able to understand Welsh—only that they understand English. That is simply not just. Welsh and English are not treated on the basis of equality, even though it would be reasonably practical and appropriate in the circumstances for them to be so treated—as the 1993 Act provides.
	In Sir Robin Auld's review of the criminal courts of England and Wales in October 2001, there was a suggestion that bilingual juries should be given further consideration in the interests of ensuring that each defendant has a fair trial. The result was the consultation paper of December 2005 produced by the Office for Criminal Justice Reform. This posed five questions in respect of bilingual juries, which were: would they be justified in principle; could they be reconciled with random selection; how would the power to order a bilingual jury be exercised; what were the wider implications for Crown Court trials in Wales; and what were the preferred options for the summoning of juries?
	I do not have time today even to begin to discuss those matters, but I have seen some of the responses to the consultation paper. I want to refer to the opinions of the legal profession, as expressed by the standing committee for legal Wales, which includes the presiding judge for Wales and many other individuals and institutions. I have also seen the responses provided by my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd) and by Mr. Gwynedd Parry of Gray's Inn and the university of Swansea.
	Those responses provide a comprehensive and compelling set of answers in favour of bilingual juries. However, the problem that we face stems from the Government's lack of response to the consultation, and their inaction. The action that the Government should take is clear, and I humbly suggest that my Bill would offer a way to ensure that the Juries Act 1974 was properly amended. I trust that the Government will take heed.
	In conclusion, I want to refer to the well known story of Dic Penderyn, hanged for his part in the Merthyr uprising. Dic Penderyn, of course, is emblematic to many Welsh people of all that was wrong with our systems of government and justice. On the scaffold, Dic is reputed to have said, "O Lord this is an injustice." What he actually said was, "O Arglwydd dyma gamwedd." Penderyn was tried in English but was sent to his death speaking Welsh.
	Today, it would not be right for a defendant to face a life sentence unsure that the members of a jury had understood his evidence as perfectly as they might. Neither would it be right, in the case of an acquittal, for the family of a victim not to be wholly confident that the quality of the evidence against the defendant was apprehended in full by the jury. On both those counts, the case for bilingual juries is overriding. My Bill would ensure that neither of those two eventualities need prevail, and I commend it to the House.
	 Question put and agreed to.
	Bill ordered to be brought in by Hywel Williams, Dr. Hywel Francis, Mr. Elfyn Llwyd, Mr. Dai Davis, Mr. Roger Williams, Michael Fabricant, Mr. Angus MacNeil, Andrew George, Nia Griffith, Adam Price and Mr. Dan Rogerson.

Angela Smith: We are all aware that it was the previous, Conservative Government who broke the earnings link in the first place, and that in statements in the past the Opposition have made it clear that they are proud of that fact. Can my right hon. Friend inform the House about the work he has done to forge a new consensus on this significant issue?

John Hutton: It is important that there should be consensus, if possible, about long-term reform of our pension system. That is precisely why my right hon. Friend the Prime Minister established the Pensions Commission in 2002. It has done sterling work in helping to forge agreement across the parties about the future of our pension system, which is a good thing. My hon. Friend draws attention to the actions of the Conservative Government in relation to pensions and I want to say one or two words about that in a second.

John Hutton: We all look forward to the hon. Gentleman's rewriting of the history of that issue. I know that he was a supporter of breaking of the link to earnings, so perhaps he will provide his justification for that later. It certainly had the effect of reducing public spending—obviously so—but it created the legacy of pensioner poverty that we had to address when we came to office, and in relation to which we have made significant progress.
	In 1997, one in four pensioners faced the indignity of living below the poverty line. Many had to live on as little as £69 a week. Change to put that right was our first priority, and rightly so. Since 1997, 1 million pensioners have escaped from relative poverty, and more than 2 million from absolute poverty. We are spending £10.5 billion a year more—nearly 1 per cent. of gross domestic product—on pensioners than we would have done had we continued the policies that we inherited in 1997. We have increased the basic state pension by significantly more than inflation, equivalent to more than £350 a year extra for a single pensioner. The poorest third of pensioner households will, on average, be £2,000 a year better off in 2006-07 than under the system of 10 years ago. As a result of all those measures, pensioners are, for the first time in a generation, less likely to be poor than any other group in society.
	Our second priority was to improve confidence in the private pensions market, which is why we acted to clear up the pensions mis-selling scandal and why the Pensions Act 2004 created the new pensions regulator, the Pension Protection Fund and the financial assistance scheme. However, despite those important changes, real and obvious challenges remain for the long-term future of our pension system. That is why, as I have already said, my right hon. Friend the Prime Minister established the Pensions Commission in 2004 to assess what further reforms might be necessary to meet them.
	The commission identified four major issues. First, people were not saving enough for their retirement. Secondly, by 2050, there will be 50 per cent. more pensioners than today, while the ratio of those in work to those in retirement will have halved. Thirdly, as a result of a historical legacy, the current state pension system is, as we all know, complex and delivers unfair outcomes, especially for many women and carers. Finally, if we maintain current indexation policies, the basic state pension will be worth only £35 in today's earnings terms by 2050 and more than 70 per cent. of pension households could be eligible for pension credit.

Lynne Jones: The Secretary of State is right to say that many pensioners are, thanks to the Labour Government, much better off today, but the Pensions Commission recommended the restoration of the earnings link by 2010 or 2011 and Government proposals do not introduce that measure until 2012 at the earliest. Is not my right hon. Friend concerned that that is too late to improve incentives and it may also mean that the value of the state pension could continue to decline—in the view of Age Concern, to the equivalent of only £75 a week?

John Hutton: My hon. Friend is right, but she will also be aware that Lord Turner and the pension commissioners have welcomed the Government's proposals for taking the commission's conclusions forward. We have always made the point—and it is particularly incumbent on those who hold ministerial office—that it is important to make it clear to our electorate that we will carry out the reforms when we believe them to be affordable. That is rightly a judgment for the Government and Ministers to make. It should be challengeable, as it is in the House and elsewhere, but we believe that we are taking a prudent and sensible course of action. I do not believe that restoring the earnings link in 2012 will materially affect any of the calculations or assumptions that underpin the Turner report, particularly in respect of those who are most likely to benefit from the reforms.

Michael Weir: Although the restoration of the link is welcome, how does the Secretary of State respond to the National Pensioners Convention, which argues that the link has not been restored to its previous level? Previously, the Secretary of State had the option of making a link to either earnings or prices—whichever were more beneficial—but the pension is being linked now only to earnings. Why not return to the previous position?

John Hutton: There is some flexibility in the Bill with respect to the issue of prices or earnings, which I believe is right. I am surprised that the hon. Member for Angus (Mr. Weir) has found the time to join us today, as I thought that he was busy celebrating the 300th anniversary of the Union— [Interruption.] I am sure that many of his constituents are.
	I believe that the Bill addresses all those crucial challenges head on. Crucially, it does so in a way that promotes personal responsibility for dignity and security in old age with outcomes that are fair, simple, affordable and, above all, sustainable. Part 1 provides for a simpler and more generous state pension, a simplified state second pension, new rules on eligibility that will give women and carers a much fairer deal and a higher state pension age.

John Hutton: I welcome my hon. Friend's support for the policy and I accept his concern, which is shared by Members on both sides of the House. It is worth making two points. From an historical perspective, when David Lloyd George and the Liberal Government introduced the state pension in the early part of the last century, it was payable at the age of 70—the average life expectancy for the people mentioned by my hon. Friend was barely 50—so it was not a brilliant deal. We are not proposing anything as draconian. Secondly, the Pensions Commission identified that problem and suggested that the Government continue to make sure that pension credit was payable at 60. We are looking carefully at that proposal as one way of addressing people's concerns.
	It is worth bearing in mind the fact that life expectancy has increased for people in all parts of the United Kingdom, as well as for all occupational groups. We can all look forward to a longer period in retirement, but if we want the state pension to be simpler and more generous—that comes at a price, as we all know—we have a choice. Either we try to find a way of making the additional expenditure sustainable in the long term without the need for tax rises, or we go down the easier route that some hon. Members would advocate by loading it all on to tax rises and passing the bill on to future generations. I do not believe that it is prudent or responsible to pass that problem on to our children and grandchildren, who would pay the cost of the package in extra taxes. That is dodging the issue, and I do not think that we should do so.
	While it is unpopular to talk about working longer, the simple fact is that if we are not prepared to increase the state pension age, we will create an unsustainable financial burden for future generations which, as I said, is the wrong thing to do. The increase in the state pension age is therefore at the heart of the Bill, ensuring the sustainability of the reform package and locking in the essential stability that is needed in any successful pensions policy. Part 2 implements a number of measures designed to support good quality employer pension provision by reducing the regulatory burden and making the existing system simpler for employers and providers.
	Clause 14 allows occupational pension schemes to do away with the complexities of the detailed rules on guaranteed minimum pensions by converting members' rights accrued between 1978 and 1997 into a new scale of benefits. The requirement for the new rights granted after conversion to be of at least equal actuarial value to those that they replace will properly safeguard members' interests, while the fact that a scheme is allowed to adopt a unified and streamlined benefit structure will enable administrative savings and give members greater certainty about their rights in the scheme as well as greater flexibility to transfer successfully to other schemes.
	Clause 15 abolishes contracting-out for defined contribution schemes, as recommended by the Pensions Commission. During the Bill's passage through Parliament, we intend to take powers to enable us to remove the complex rules governing rights accrued in contracted-out defined contribution schemes, following the outcome of the review of the open market option for annuities that we expect to be completed by the end of the year. The removal of those rules will simplify the management of rights for both schemes and members, reducing costs to schemes and supporting our aim of simplifying pensions regulation. In addition to the measures in part 2, our rolling deregulatory review offers the opportunity for further radical change, not merely to rewrite existing legislation but to cut red tape and make it easier to deliver workplace pensions.
	My hon. Friend the Minister for Pensions Reform today announced further details of the institutional review that will consider how the functions of organisations involved in the regulation and protection of workplace pensions—such as the pensions regulator, the Pension Protection Fund and the Financial Services Authority—can best develop within our new pensions settlement. It will also extend to cover those involved in the provision of advice, mediation, dispute resolution or compensation for pensions.

Julie Kirkbride: The right hon. Gentleman has been extremely generous. I ask my question on behalf of a number of constituents who are worried—that is, a clearly defined group of people who are finite in number, who took early retirement through a private pension scheme that has subsequently gone bankrupt. The Secretary of State knows that as a result of previous changes to legislation, such people get a much reduced income, although they could not have anticipated such a change in their circumstances at the time of making those arrangements. Will he therefore consider using the Bill as a vehicle to address the wrong done to that group, who could not anticipate the change in their arrangements, given that as a result of the PPF, anybody considering taking early retirement in the future will be well aware that their income in later life might be reduced?

John Hutton: Indeed; we will do that. We made clear in the White Paper that we published in December what the express statutory remits for the personal accounts delivery authority should be. We have chosen not to set them out in the Bill because the House has not given consideration to the legislation to set up the personal accounts system, and it would be pre-emptive if the Bill sought to make provision when the substantive legislation has not been brought forward. I can assure my hon. Friend that we will introduce legislation, I hope in the next Session, and that that will be one of the express statutory objectives of the new personal accounts authority.
	The authority will be an independent body with financial sector expertise that will, in the first instance, advise the Government on the design of the operational structure of these new accounts and prepare to put in place the necessary contractual arrangements with the private sector. It will then be responsible for beginning the process of creating the infrastructure to deliver the scheme from the contracted providers.
	The creation of the delivery authority provided for by the Bill is the first step towards establishing personal accounts. Following the current consultation on last month's White Paper, we intend to legislate further on the detail of the new low cost personal accounts, which will be the catalyst for a new savings culture in our country. They will help, rather than compel, people to save for their retirement. The accounts will be transparent. It will be the people's money, not the Government's.
	Savers will have choice over which funds to invest, and auto-enrolment will secure economies of scale so that individuals can take the benefit from lower charges and higher returns. Simple, low-cost, flexible and portable personal accounts may generate an additional £4 billion to £5 billion of new net saving each year—equivalent to about half a percentage point of gross domestic product. They will help millions of people to take greater responsibility for building their retirement income by giving them greater opportunities and incentives to save and building on the solid platform provided by the changes to the state pension system in the Bill.
	Part 4 contains a number of technical and financial provisions and provides that the operation of the personal accounts delivery authority will extend to Northern Ireland.

Philip Hammond: My right hon. Friend is right and I shall deal with affordability shortly.
	The second reason that the increase in means-testing matters is that, although its use has allowed poverty in retirement to be targeted at relatively low cost to the Exchequer in the short term, its expansion has a long-term cost—a reduction in the incentive to save. Since Labour came to office, the savings ratio in this country has almost halved. It is not difficult to understand why. An effective marginal 60 per cent. withdrawal rate acts as a major disincentive to saving for retirement for those who are either caught in that trap or believe that they might be caught in future.
	Now the Government propose to change tack and halt the erosion of the value of the basic state pension. The Secretary of State knows that the 2005 Conservative manifesto pledged to link the basic state pension to earnings. At the time, the Government condemned that pledge as unaffordable. We therefore welcome the conversion to a commitment to the earnings link from 2012 and the simplified contributions rules, which mean that men and women who have worked or cared for someone for 30 years will be entitled to a full basic state pension in their own right. We also accept the increase in state pension age that will partly finance the changes.
	The Government have taken major steps forward and the Secretary of State should be congratulated on his success in persuading the Chancellor to agree to the provisions, especially given the unconventional style of his charm offensive on No. 11.

Philip Hammond: The hon. Gentleman is absolutely right. The commitment that we made at the last election was the commitment that it was prudent to make at that time. We have already heard today that the Chancellor has insisted that the Secretary of State's commitment will be effective only in 2012 or 2015. We believe, however, that restoring the earnings link to provide that stability is affordable now.
	The Turner commission emphasised the need for a bipartisan approach to pension reform. We agree—but not because of a lack of evidence to make a partisan case. We know who is responsible for accelerating the collapse of Britain's pension provision from the strongest in Europe to among the weakest, as the right hon. Member for Birkenhead (Mr. Field) has suggested. We also know whose decision it was to mount a £5 billion a year raid on our pension funds. We know who has presided over 60,000 occupational pension schemes entering wind-up on his watch, and who is responsible for the Government's lamentable failure to respond effectively to the challenges of the ombudsman's report and to address the needs of the victims of the pre-Pension Protection Fund pension scheme failures. We still agree with Turner, however, because, whoever is responsible for having exacerbated the problem, it makes sense in the national interest to work together to pursue political consensus in trying to sort the matter out for the future.
	The principal measures in the Bill will not be implemented until the next Parliament. Nobody knows which of us will be implementing them. The proposed changes will affect people's long-term planning and savings behaviour over a 40 to 50-year time horizon.

Philip Hammond: With respect to the hon. Lady, I have already acknowledged that by welcoming the proposal to standardise the contribution requirements for men and women at 30 years' work or caring.
	Consensus cannot mean a blank cheque for the Government of the day. The building of consensus, however important, does not excuse the Opposition of the day from their duty to scrutinise the Government and hold them to account. A lasting consensus will be one that is built on solid foundations, on transparency, on knowledge and on a widespread understanding of, and acquiescence in, the proposed changes. It will not be one that is based on ignorance. It must be a consensus that embraces all of our society, and not one that is built in the Westminster village behind the backs of the people whom we are here to represent. Even while supporting the Bill, therefore, we must debate the unresolved question of the level of mean-testing. We must carefully consider the changes proposed, identifying the winners and losers as the state pension pot is redistributed, and we must analyse critically the proposals for personal accounts. We will therefore approach 2012 as a society that has made a set of decisions openly, with a full understanding of what we are doing, why we are doing it and what we are seeking to achieve.
	I am bound to say that we have been disappointed by the Government's management of the consensus-building process. The country at large has little or no understanding of the state pension reform, beyond the headlines of the earnings link and the increase in the state pension age. Even more worryingly, a large proportion of employers—particularly smaller ones—who will face compulsory pension contributions under the package are completely unaware of the additional burden. Closer to home, I was surprised by the Secretary of State's announcement today that he intends to incorporate new provisions in the Bill, which we are only now considering on Second Reading. We have not had any discussions about those new provisions, and know nothing about them. While we have appreciated the opportunity to have a couple of briefing meetings with the Minister and his officials, it has been difficult to obtain some of the key information required to scrutinise the proposals properly.
	I tabled a dozen or so parliamentary questions in July, seeking information about the proposed changes. Those questions fell unanswered at Prorogation in November—no doubt the victim of the Minister's traffic light scheme. Despite a ministerial promise on 15 November to answer them anyway, not one had been answered to me a month later— [Interruption.] The Minister says from a sedentary position that they have all been answered now. When did the answers arrive? It was this morning. In the meantime, typically, as soon as the House resumed for a new Session in November, the hon. Member for Yeovil (Mr. Laws) re-tabled all of my questions word for word. He has had a bit more success than I had; so much for consensus-building.
	To return to the substance, hanging over the debate is the unresolved difference in projections of the level of means-testing that will remain in the system and its impact on savings behaviour and thus on the likely success or failure of personal accounts.

Lynne Jones: I agree with the hon. Gentleman about the need to reduce means-testing as much as possible. There are two ways of doing that: one is to improve the value of the state pension and its universality as compared with means-tested benefits; the other is to hold down or reduce in real terms means-tested benefits. Can he assure the House that Conservative policy is no longer to do the latter, because the Conservative party was advocating that at the previous election?

Philip Hammond: I want to make a little progress.
	In a moment I shall deal with the part of the Bill that introduces the personal accounts delivery authority, and with the wider elements of that part of the reform package. First, however, let me draw attention to some issues that need to be addressed in the interests of transparency.
	There is a great deal of concern about the element of uncertainty over the starting date for the earnings link in 2012 which the Chancellor has introduced into the equation. We have a long-term framework for public-expenditure projections. The Treasury, we are asked to believe, cannot take a view on whether the earnings link will be affordable in five years' time, but is apparently quite happy to enter into 20-year private finance initiative contracts and the ordering of military equipment for delivery in a decade.
	It must be concluded that this is simply another example of the Chancellor's wish to have the last word on every single subject: of the "clunking fist" insisting on stamping its mark on every step that the Government take. Rather than a graceful move allowing the Prime Minister and the Secretary of State to take the credit for having the good sense to adopt our policy of an earnings link for the basic state pension, an elaborate, confusing and—if I may say so to Labour Back Benchers—politically costly contortion has been performed, so that long after the present Prime Minister and, I suspect, the present Secretary of State are gone, the Chancellor can be the one to announce that the earnings link will definitely be introduced in 2012. That, I suggest, is the worst kind of manipulation for party or, in this case, factional political reasons.
	We understand that every commitment any Government make is always implicitly subject to affordability, but given the long-term framework for public expenditure decisions, that caveat can only be to protect against a catastrophic and unpredicted downturn in the economy. Therefore, unless the Chancellor knows something that he is not telling us, we need the Government to be much clearer about 2012 and to say explicitly that that date will only be delayed in the most extraordinary and extreme economic circumstances. Anything less will introduce an element of doubt and confusion that will undermine one of the fundamental purposes of the whole reform package: to create stability upon which people can plan their own futures.

Philip Hammond: Perhaps the hon. Lady will let me answer her first question before she seeks to ask another. I hope in this debate to get Ministers to establish whether the Government, while recognising all the difficulty that there is and the impossibility of doing anything more in the short term, none the less harbour an aspiration in the medium to long term, when it becomes possible, to reduce means-testing further; or do they, as some Opposition Members suspect, think that a level of means-testing of between 30 and 40 per cent. is a desirable status quo that they would want to preserve in the long term? I simply seek to establish that we are all on the same page in respect of the long-term wish list.

Philip Hammond: Perhaps the hon. Lady will deal with this matter in her speech, and I can then intervene on her if that proves to be appropriate.
	The second area of concern relates to the transitional arrangements for moving from the existing required years of contribution to a blanket period of 30 years of work or qualifying caring in 2010, because, to be blunt, there are no transitional arrangements. As the Bill currently stands, there will be a sudden step down, from 39 years to 30 years for women, on 6 April 2010. Therefore, a woman with 30 years' worth of contributions who reaches the age of 60 on 5 April 2010 will spend the rest of her life on approximately three quarters of a full basic state pension, while her neighbour who reaches the age of 60 a day or two later will enjoy a full basic state pension. The average life expectancy for women at 60 years of age is 24 years, so the difference in terms of current earnings over the remainder of those women's lives would be something in the order of £26,000. That cannot be right and is bound to lead to a real sense of injustice. It offends one of our basic principles, accepted by the Government, for the assessment of the pensions reform package: that it must be equitable, and be seen to be equitable, between different groups in society. It should not be beyond the wit of a competent Government to devise a cost-neutral phasing approach that avoids the perceived injustice of a cliff edge in 2010.

Philip Hammond: Excellent. So the refunds will be retrospective, which deals with one of the concerns that, as the Secretary of State knows, we have raised. That has slightly pulled the rug from under the Minister for Pensions Reform, who said only last Monday at departmental questions that
	"contributions paid at the time should not be refunded".—[ Official Report, 8 January 2007; Vol. 455, c. 16.]
	So he was doubtless in the loop on the discussions, just as I and my hon. Friend the Member for Eastbourne (Mr. Waterson) were.
	The third issue on which I want to touch is the changes to the state second pension. We accept that these changes are part of the financing package that allows the introduction of the earnings link, while containing state pension spending within a given percentage of gross domestic product. However, there will be a distributional impact on different groups within society, and it is important that those affected by these changes understand them. Essentially, those earning above £34,000 a year will continue to pay national insurance contributions on a growing part of their earnings above that level, but will no longer receive any earnings-related element of pension accrual on those contributions. So the part of the contribution that pays for the earnings-related state second pension becomes a straight tax.
	Many in this House will be thinking, "So what? People on £34,000 a year and above can handle that." However, because this will be frozen in money terms, over time, the tax will affect everyone on £18,000 a year or more in today's earnings terms. As Amicus said in its briefing, it will affect people on average and below average incomes. For those who have contracted out of the state second pension into an occupational or personal pension plan, their contracted-out rebates will reduce or end altogether, depending on whether the scheme is defined benefit or defined contribution. So their contributions to their chosen DB schemes will be reduced, and those in DC schemes will be forced to contract back into the state second pension scheme at the very point where it is reducing the earnings-related benefits that it provides. Part of the package that may be, but it will strike many people as an odd way to promote confidence in long-term pension saving, and it has received little or no publicity outside the narrow confines of the industry and the Westminster village.
	What of the huge cash saving to the Government from abolishing contracted-out rebates? Perhaps the Government could make it clear what the figure is. The White Paper originally gave an estimate of £4 billion, and the briefing that most Members will have received refers to that figure, but the regulatory impact assessment says that it is less than £2 billion. That is a slightly disconcerting lack of precision on the part of the bookkeepers. Whether it is £2 billion or £4 billion, it has not been taken into account in the Government's overall costing of the reform package. In other words, the Government have not taken into account that cash saving. The Secretary of State has said that it, or part of it, should be used to support pension saving, but we have heard no such commitment from the Treasury. I would be grateful, as would many people outside this place, if the Minister, when he winds up tonight, could make it clear whether the Government intend that that money, or a proportion of it, will be available to support the introduction of personal accounts and funded pension saving, and whether that position has been agreed with the Treasury.
	The fourth issue that I want to highlight is the proposed change to pension savings credit that will create a band of 100 per cent. withdrawal rate for some of Britain's poorest pensioners. Those with an income just above the basic state pension with, for example, a tiny occupational pension or small amounts of savings income will be hit the hardest. Almost 1.5 million pensioners will be worse off than they would be under the existing system. For example, by 2010, a pensioner with an annual income just £250 a year above the basic state pension will lose £145 of savings credit. The Government say that that is part of the package, but hitting the very poorest savers is an odd way to encourage saving for retirement among those on lower incomes, and I urge the Minister to look again at that provision. I guarantee that our colleagues on both sides in the other place will want to do so if he does not.
	Part 3 of the Bill establishes the personal accounts delivery authority with a remit to work up the detail of the scheme that the Government have outlined or propose amendments to it. The promotion of pension saving to the millions of people who are not saving at all or not saving adequately is an essential element of this reform package. My colleagues and I had to think long and hard about Turner's proposals to use auto-enrolment and compulsory employer contributions to provide a targeted workplace saving scheme focused on the lower paid. Despite the burden the proposals will impose on business, we took the decision to support them and, by doing so, allowed the debate to move on to one about the shape and form of personal accounts. We took that decision because we believed that it was in the national interest for us to do so. But as the debate has moved on, several problems have arisen. First, the level of means-testing projected for 2050 on either model represents a serious disincentive to pension saving. The Government envisage a model based on generic advice only, but it is clear that with 30 per cent. means-testing, let alone with 45 or 50 per cent., many people will be, understandably, confused about whether they would merely save themselves out of means-tested benefits to which they would otherwise be entitled. It is unclear at this stage who will take on the thankless task of giving that generic advice, and who will pay for it. Pension saving will not be right for everyone in a means-tested environment, and in a model free from individual advice, we all have an obligation to ensure that Government do not promote saving that does not pay, with the potential for the mother of all pension mis-selling scandals.
	The issue cannot be fudged or avoided. It must be confronted head-on. The Government must stop making statements like the one that the Secretary of State made earlier or the one on the Minister of State's blog that
	"even a part-time worker earning £6,000 could receive almost £2 in retirement—getting out double what they put in".
	If any pension provider made such a statement, he could expect the regulator's knock on the door about five minutes later. If we are to have an open and transparent debate about the value of personal accounts and if we are to convince people of their credibility as a long-term savings vehicle, the Government must be disciplined in the way they present the possible returns. When he winds up the debate, I want the Minister for Pensions Reform to give a commitment that the Government from now on will use the same regulated assumptions and restrictions to express projections of returns to savers in personal accounts that regulated pension providers are required to use. In that way, we will hear no more sloppy "£2-for-£1" offers; instead, projections of returns to different groups of savers will be expressed in the industry-standard, regulated form.

Philip Hammond: I heard the Secretary of State's earlier remarks, but I am not sure that the hon. Gentleman is exactly right in what he says. My point is that telling people at the start of their working lives that they will get back £1 for every £1 that they put in is very different from telling them the same thing in the last year of their working lives. They are two very different propositions, and that is why we have regulations that require investment providers to use assumed rates of return when they present a proposition to the public. My suggestion to the Minister is that the Government need to be equally disciplined.
	Our second concern is an overriding one, and has to do with the risk of levelling down among employers who currently offer good-quality occupational pension schemes. The personal accounts system will allow an employer either to offer personal accounts with a 3 per cent. contribution, or to auto-enrol all employees in that employer's own pension scheme, provided that it has an employer contribution of at least 3 per cent. The overwhelming majority of occupational pension schemes have employer contributions in excess—and sometimes substantially so—of 3 per cent. The evidence is that many employers faced with the prospect of much higher uptake of membership of pension schemes as a result of auto-enrolment, and thus much higher costs, will compensate by reducing their compensation level over time. If they do not do that for all employees, they will certainly do it for new joiners. The achievement of more savers but less saving would represent the ultimate failure of the personal accounts dream.
	We believe that the Government must insert into the delivery authority's remit a statutory obligation to seek to minimise the levelling down that I have described. They must set out, for the authority and for Parliament, the explicit criteria against which the scheme's successful implementation will be judged. How much levelling down is an acceptable trade-off for how many extra savers and how great an increase in total saving?
	Thirdly, personal accounts were presented as a targeted intervention to deal with the market's failure to provide pensions for people on lower incomes. The Turner commission specifically recommended a £3,000 annual contribution cap to prevent unfair, state-subsidised competition for the savings of higher earners. Like most of us, Turner thought that those people could be left to make their own arrangements.
	The Secretary of State has asserted that cherry-picking Turner is not an option, but the Government have ignored his advice. They have said that they will set a cap at a minimum of £5,000 a year—a level that would embrace more than 95 per cent. of all current members of occupational pensions schemes. In other words, the Government have moved by stealth from introducing a targeted intervention aimed at a specific and under-served group of savers to making a grab for almost the whole of Britain's occupational pension savings sector.
	That would be a disaster for the pensions industry, for occupational pension scheme members, and for the political consensus in respect of a targeted intervention. It would also make it almost impossible to measure the scheme's success in attracting its target audience of low-income savers, and I hope that that is not the Government's intention. The Government must revert to the original intention behind personal accounts, which was that they would be a targeted intervention to support people on average or below-average incomes, and that means that they must take Turner's advice on the level of the contribution cap.
	We support the principle of targeted intervention to promote workplace saving through auto-enrolment and compulsory employer contributions, but such a scheme will work only if it is based on political consensus. In trying to turn it into something other than the one Lord Turner recommended, and which the original White Paper proposed to introduce, the Government are pushing the boundaries of that consensus too far.
	The details of personal accounts will be set out in a future Bill, but I hope I have made it clear that if the consensus underpinning this Bill is to extend to the Bill introducing the personal accounts scheme, the Government must address the questions I have raised. In particular, they must revert to targeting the scheme on its intended audience.
	The need for pension reform is clear and the need for political consensus to underpin sustainable reform is even clearer. We are willing to play our part in building a robust consensus based on a solid proposition and underpinned by open and transparent analysis of the challenges that have to be addressed. As my remarks about personal accounts have confirmed, we believe that, taking the package as a whole, we have some way to go in building such a consensus. The Bill makes a good start, by delivering reforms to the state pension system that will form the foundation on which the broader reform package is constructed.
	In Committee, we shall ask the Government to answer the points about the implementation of state pension reform that I have raised this afternoon. We shall ask them to acknowledge our concerns about personal accounts by giving clear guidance to the delivery authority about the required outcomes, and to address the threat to the climate of confidence in personal accounts posed by the ongoing public relations disaster that is their record on occupational pension scheme failures.
	We welcome the Bill and I sincerely hope that by the time the Bill to implement personal accounts comes before the House, the Government will have acted to address the serious issues that hang over the future of that project, and thus rebuilt the political consensus without which it cannot succeed.

Kali Mountford: The last time the House debated pensions we ended on a note of consensus about consensus, which is a good place to start, on which I agree with the hon. Member for Runnymede and Weybridge (Mr. Hammond).
	I want to dispute with the hon. Gentleman a little, however, and travel a little way down memory lane in respect of his point about the link with earnings. He is right to have given that some analysis, but it needs a little bit more. I think that the previous Government's decision to break the link with earnings was rational and they did it for good reasons. That point bears thinking about this afternoon, as we are deciding whether to restore the link. We have to do so for good reasons. Those reasons, and the link's affordability and sustainability, must be considered in the context of why it was rationally broken, which was because the economic circumstances of the time were entirely different.
	I remember that time very well indeed. I was a parent, recently divorced and buying a house by myself for the first time. When I went out shopping in the morning, I did not know whether interest rates would have changed by the time I got home in the evening. Those were different times. It was reasonable and rational in those circumstances to take that decision when pensioners did not know whether their pensions would change or whether they could afford things any more. I believe that the Government were right to say at that time that prices were rising fast and getting out of control. It was reasonable and rational to decide that carrying on was not the right way for pensioners to move forward. There was a big debate in the House and both sides divided on what was the best thing to do at that time. Now, however, the circumstances are completely different and there are completely different controls on the economy, so it is possible to look at affordability. Now is the time to move forward.
	I want to concentrate most of my remarks on another issue—that of unfairness, which I believe has been built into the pensions system for many years because it was part of our social history and part of what we thought of as normal for family life. It was always regarded as normal for mum to stay at home and for dad to go out to work. That was just the ordinary way of things, but the world has changed and everything has to change with it.
	It is now right to look ahead at a number of issues. We were looking at a demographic time bomb in the 1980s, particularly in respect of how many people would be in work. We did not properly look forward to its impact on pensions, but now it is coming home to roost. It could be said that the demographic time bomb is about to explode. Now is the right time—looking back 30 years and looking forward another 30 years—to take decisions. If we do not take them today, we will be making a very big mistake indeed. We have to view the issues in that context. The hon. Member for Runnymede and Weybridge is entirely right in his analysis of demographic change, so now is the right time for the Bill.
	The Bill is also right in its social context, as we are seeing changes in family life and changes to work patterns. It is also right to think about young people and what we expect of them. I do not think that it would be right to tell young people that we expect them to pay for the needs of older people tomorrow so that the elderly can enjoy a luxurious retirement at their expense. It would not right be right to shift the burden of responsibility on to them. We need to draw some logical conclusions from that.
	I am left looking at a particular group of people—those who have traditionally been left out of the pension market almost altogether. I refer to working women, 30 per cent. of whom draw full state pensions, but the majority of whom do not. That is because, despite huge changes in social life, women are still the main carers. Women are still the main people who look after young children and who, at the end of their working lives, remain the main carers of elderly parents or others in the family who are in need. We have to recognise that. It is not just a family responsibility, but the responsibility of us all, because the economic impact is huge. We are talking about a contribution to the nation of billions of pounds. It is not just thousands of pounds of investment for the family, but billions of pounds of investment for the whole country. We owe these people—not only but mainly women—a huge debt of thanks.
	The Bill goes a great deal of the necessary distance. It is not just a matter of saying thank you, as thanks are worth nothing if they are not backed up with something positive. There are a number of ways of dealing with that problem. The debate that has led to the consensus considered a whole range of ways of opening up the whole Pandora's box by starting from scratch and devising a new pensions system. We could have started again and looked at how citizens could be rewarded for their contributions to society. That would have been one rational way of proceeding, but it would have been extraordinarily expensive and might have thrown away another factor that our society has grown to value. There was already an in-built consensus about it and everyone understands it. I am talking about the national insurance system. The national insurance system is a misnamed system. It is not really an insurance system by anybody else's standards. It is not an insurance system in the sense that means that someone gets rewarded if their house burns down. It is not that kind of insurance. It is not the sort of savings scheme that anybody else would recognise as a savings scheme. It is the kind of British system that only the British really understand. We know and love it, and we know what it means to us. There is a definite consensus about it. Everybody who pays it knows what it means to them. It was right not to scrap it, but to say, "Let's see what we can do with what we already have, and what will bring the benefits that throwing that out and bringing in a new citizen's pension scheme would have brought?"
	That was the right way to go. It has addressed all the concerns about people who work, but miss out some valuable years of their adult working lives because they are making important contributions to family life by bringing up children and looking after elderly or disabled people in their family. Recognising that was crucial. Reducing the qualification period to 30 years was a simple, but crucial, mechanism. At a stroke, it achieves what an otherwise much more complex way of achieving the same end would have done. I congratulate the Government not just on listening carefully to what women were asking them to achieve and achieving that end, but on doing so in a rational way. I am grateful for that.
	I ask the Government to think again, however. I made this point in an intervention, but for the benefit of the House I will explain it more carefully. There is a group of people—it may be a small group—who I fear may get left out of all this. A person could take on a number of part-time jobs, all of which added together as though they were one job could result in an amount of money that would qualify that person to pay national insurance. At the moment, none of those jobs, on their own, would qualify for national insurance.
	A person might do one job before their children go to school, another after the last child has been dropped off at school, another after they have picked the child up from school, and another after the child has gone to bed. People fit those jobs around their family life. All the jobs are for just a couple of hours and are low paid. They are all proper jobs and they are all a valuable contribution to our economy. Added together, they do not come to a whole day's work that any one employer would recognise, but all of us would recognise them as a full day's work. However, those people pay no national insurance contributions and so do not qualify for a state pension. That has the feeling of unfairness about it. I recognise what the Minister has explained to me about administrative burdens. However, I hope that we can find a way around the problem.

David Laws: I congratulate the hon. Member for Colne Valley (Kali Mountford) on her thoughtful speech. I start where she started, with a note of consensus about the Bill. Although many of us have put this on record before, it is worth pointing out that the Bill has its origins in the report of the Pensions Commission. I pay tribute to the work that Lord Turner and his two fellow commissioners put in, as well as that of all the staff of the commission. The Work and Pensions Committee's report on this matter pointed out that the way in which the Turner commission operated and managed to influence the political and academic debate, and the debate in the sector, was a model for the way in which such independent commissions can work to have an impact on Government policy.
	In the spirit of generosity, I congratulate the Secretary of State, Work and Pensions Ministers and their departmental officials on managing to deliver the Bill on time, especially given the opposition in government at the beginning of the process to the substance of many of Lord Turner's proposals. It must have been tricky to secure the agreement of the Chancellor. We can only hope that his agreement will survive beyond any point at which he might take over as Prime Minister later this year. We hope that some of the proposals with which he earlier disagreed will be brought forward.
	It is worth reflecting on the effect that the Pensions Commission had in helping to forge an agreement on pensions policy. The range of issues on which there is now agreement between the three political parties is far broader than anybody could have expected, even before the last general election. They agree on the earnings link, on raising the state pension age—traditionally a controversial and sensitive issue—on the issue of women's pensions, and on a number of other key issues, including auto-enrolment. As the hon. Member for Runnymede and Weybridge (Mr. Hammond) suggested earlier, the Conservatives support the compulsory employer contribution. Those are all marked changes for the parties collectively, so it is worth paying tribute to the Turner commission and the Government for getting this far.
	I hope that the Secretary of State will excuse me for injecting a note of caution about that great consensus, because as he and other hon. Members will know, in the past there has been cross-party consensus on pensions issues on a number of occasions, and that consensus has not always lasted. Yesterday, I was looking at "The Five Giants: A Biography of the Welfare State", the influential and impressive book on the welfare state by Nick Timmins, now of the  Financial Times. In an interesting passage worth reflecting on today, he recalls the last time there was major consensus between the three political parties on pensions reform. It was in 1975, when there were proposals to link the basic state pension to earnings, and to introduce a state earnings-related pensions system. Nick Timmins says that, in 1975,
	"After all the controversies which had surrounded pensions for two decades, the Bill which was to affect the future of pensions of millions was given an unopposed second reading with fewer than a dozen MPs in the chamber."
	There are a few more than a dozen MPs present at the moment, but we will see what the numbers are at 10 o'clock. I suspect that today's Second Reading may be unopposed, too. Mr. Timmins continues:
	"The opposition spokesman who waved it through was a fresh-faced Norman Fowler, just a few weeks into his new job."
	Of course, just a few years later, the Government who introduced the Bill were swept away. The account goes on:
	"A decade later, he"—
	that is, Norman Fowler—
	"was to attempt to consign SERPS to history.
	But in 1975, the pensions industry was desperately concerned to have its future settled after the frustrations of the previous two decades. The new scheme did provide a clear role for the private as well as the public sector".
	The Bill, essentially unchanged, became an Act, but within a few years the great hopes for a consensus proved to be a pipe dream.

Philip Hammond: Perhaps the hon. Gentleman could clear something up for me, because I am now genuinely confused about where he stands on the issue of consensus. The last time I heard a spokesman for his party speaking about the issue, he started off by saying that the Liberal Democrats supported the cross-party political consensus on the Bill, and ended his speech by saying that we should have a citizen's pension, which fundamentally undermines the principles set out in the Bill. Will the hon. Member for Yeovil (Mr. Laws) make absolutely clear to the House whether he supports the architecture proposed in the Bill, and if so, will he stop banging on about the unaffordable citizen's pension?

David Laws: The hon. Lady signed up to the excellent report on the issue by the Select Committee on Work and Pensions, which shares my concerns about the extent of means-testing in the system. She is quite right that any reduction in means-testing that does not involve cutting means-tested benefits would result in more universal state pension provision, which I believe she supports, and a higher state pension. She will be delighted that I shall discuss the economics of that proposal later.
	First, however, may I discuss the issue that has the greatest potential to hole the consensus on pensions? The previous consensus faltered after 1975 because there were essentially two problems: the first was one of affordability—no doubt, we will return to that later—and the second was one of political philosophy. In 1975, the House signed up to a formulation that required the state to be involved in the first tier of provision and to deliver a second tier—namely, the state earnings-related pension scheme. Differences over affordability and in philosophy led to the breakdown of that consensus.
	I am not convinced that those are the two points on which the present reform will falter. It is difficult to see it faltering over the issue of affordability, at least in the next 20 years or so, because as the Secretary of State knows, the deal that he has done with the Chancellor involves a reduction in the share of gross domestic product going into state pensions between now and 2020. The Minister for Pensions Reform shakes his head, but if he looks at his own report, he will see that the share of GDP being spent on pensions goes down from 6.2 per cent. now to 6.1 per cent. in 2020. He is frowning again, but he will confirm those figures when he reads the detail of his report later.

David Laws: I am in danger of agreeing too much with the hon. Gentleman before the Scottish and Welsh elections, so I will not flatter him unduly. Those are indeed our concerns. It will be much more difficult to persuade people to save in their own accounts if there is a large measure of means-testing.
	The hon. Member for Runnymede and Weybridge suggested that there was a band of expectation for means-testing in the future, which even under the proposals is between 30 per cent.—the Government's figure—and the mid- to high 40s per cent.—the Pensions Policy Institute figure.

David Laws: What I recognise, and what the Pensions Policy Institute has already costed, is that the sort of proposal that we make would lead to a massive reduction in means-testing from the levels that the Minister is considering. I hope he will confirm that the band of expectation for means-testing for his policy is between 30 and 45 per cent.
	I do not necessarily go as far as the hon. Member for Runnymede and Weybridge in casting too many aspersions on the Government's statistics on the matter. I have no doubt that there are some very skilled and able people in the Department who have come up with the estimates. But the hon. Gentleman will understand why there is a natural instinct to believe that the Government will have used assumptions that massage the extent of means-testing down as far as possible. The Secretary of State says that these are good people and that the statistics are reliable, but during the Bill's passage we will want a much better assessment of the extent of the problem.
	The crucial issue is that of returns from the personal account. When I first saw the Secretary of State as he was paving the way for the Bill, he said that he wanted to ensure that more or less everybody who had an account would be better off as a consequence. Over the past couple of months, the Government have had to water down that commitment by saying that some people may actually lose out. Today, the Secretary of State said that the vast majority of people could expect to gain £2 for every £1 that they put into the account, despite the effects of means-testing. I am baffled by that.

David Laws: I am delighted that the Secretary of State took the trouble to intervene. I have no intention of finishing my speech without tackling precisely the points that he raised. However, underneath the bluster he appears to be rowing back from his earlier comments. Saying that many people with long work histories will get £2 for £1 and so on is different from his earlier comments. Then, he said that the majority of people who joined the scheme would get £2 back for every £1 invested, yet despite those remarks that is clearly not the Department's position, which is that the large majority can expect £1 back for £1 invested.
	Perhaps there is a consensual way ahead and I therefore look forward to the winding-up speech of the Minister for Pensions Reform and his telling us the proportion of people in the target audience for personal accounts who will be subject to means-testing. The proportion is bound to be higher in the target audience for personal accounts than the cited 30 per cent. Is the figure 40 or 50 per cent.?
	There appears to be much uncertainty and I should like to know the proportion of the target audience that can expect £2 back from investing £1. That is critical. Our ability to persuade people that it is a no-brainer to save in the personal account depends heavily on the perception that for every £1 one puts in, one gets £2 back, because even without the investment return one gets the employer contribution and the taxpayer contribution. There are few other investment vehicles that can easily provide guarantees such as £2 for £1. It then becomes easy to sell personal accounts.
	However, if all the Secretary of State can say is that the majority will get £1 for £1, that is hopeless. Many people will be especially vulnerable to losing much of their savings. They include older people, those on housing benefit, the self-employed and those with broken work histories.

David Laws: I shall give way when I have finished my point. As the hon. Lady knows, some people have enormous debts, which they may be paying at high interest rates. They will not want to save money in an account that gives them no return when they need to pay off debts on which they are paying interest rates of 30, 40 or 50 per cent. I apologise to the hon. Lady for keeping her waiting.

Anne Begg: The mention of housing benefit reminded me to intervene. The hon. Gentleman has still not made clear Liberal Democrat policy on and attitude to means-testing. All that he has said today and on previous occasions suggests that means-testing is bad and should not form part of the system of income that we pay to pensioners. As the Minister for Pensions Reform pointed out, doing away with means-testing would mean that the citizen's pension would have to be considerably higher than the income guarantee simply because there are means-tested benefits such as housing benefit, carer's benefit and so on. Do the Liberal Democrats want to do away with housing benefit, which is means-tested and important for pensioners, or does the hon. Gentleman claim that means-testing is dreadful except for the poor, for whom it is okay?

David Laws: We are clearly saying that the amount of means-testing that appears to be built into the Bill is in danger of causing mass Government-sponsored mis-selling or deterring people from saving in the personal accounts. I ask the hon. Lady to reflect on the sense of a position whereby as many as 50 per cent. of the target audience for personal accounts may lose money and have low investment returns. The report that I cited earlier, "Financial incentives to save for retirement" has several omissions, not only the hidden bit about £1 for £1, which make it clear how dubious the benefits will be for many people.
	There is also an admission in the Department for Work and Pensions report that
	"people may see a lower expected payback due to complex circumstances such as entitlement to housing benefit and council tax benefit, as well as pension credit."
	Most people would not regard the entitlement to housing benefit and council tax benefit as involving complex circumstances. Many of the people in the target audience for personal accounts are on housing benefit and council tax benefit. The report goes on to show that the difficulties involved in the means-testing will be even more significant— [ Interruption.] I am delighted that the Secretary of State is heckling me. I suspect that I am hitting a sore nerve. The report states:
	"However, a level of payback cannot be guaranteed, and the choices and characteristics which may leave a small number of people at higher risk of low payback may not be apparent to either individuals or Government during working life."
	Not only will many people lose money under this scheme but, because of the degree of means-testing, many of the people who start personal accounts will not know at the time whether they will get a decent return. I would be happy to give way to the Secretary of State if he wishes to comment on that.
	Those are not my facts—they are the facts in the Secretary of State's own report, which he does not appear to have read. They make it increasingly clear that the rather sensitive and self-conscious statement that he made on personal accounts on 12 December to the effect that:
	"We have already acted to make sure that the state pension provides a solid platform on which people can save."—[ Official Report, 12 December 2006; Vol. 454, c. 739.]
	is not true. When the Secretary of State— [ Interruption.] I am coming on to how we will vote on pension legislation. I assume that he wants to encourage the process of consensus, but it does not sound like it, given the nature of his sedentary contributions.
	I urge the Secretary of State to reflect on the report from the Pensions Policy Institute entitled, "Are Personal Accounts suitable for all?" I have no doubt that he will have read it, and he will therefore know that it contains examples of some of the at-risk groups ending up, in extreme circumstances, getting only 5p or 15p on £1 back for £1 of saving. The extent of the means-testing that is embedded in the proposed system and the inability of the Government to say whether the vast majority of people will get a two-for-one return pose a serious risk to the consensus on pensions.
	Our position is that, although we support the principles behind the Bill, we want to see serious efforts being made to deal with this problem before the Bill to introduce personal accounts comes before the House this autumn. I thought that I detected that view being expressed by the hon. Member for Runnymede and Weybridge as well. We could not, in all honesty, warmly support that Bill if we had serious concerns that there was going to be mis-selling or that many people—particularly those on low incomes—were going to lose a large amount of their savings in personal accounts.

David Laws: Thank you, Madam Deputy Speaker.
	I am not surprised that the Secretary of State is spending so much time reflecting on our plans, because he is so sensitive about the weakness of his own. That weakness is being discussed out there in the country, as he will discover when he goes out and talks to consumer groups, businesses and pension providers. These are their concerns.
	The hon. Member for Runnymede and Weybridge said earlier that people acknowledge that there is a risk of averaging down attached to the Government's proposal to set a benchmark for personal accounts in terms of the employer's contribution. There has to be some risk for the more marginal employers in those circumstances. Whether the Secretary of State likes it or not, however, what people out there really fear is not only some averaging down in existing provision, but that the personal accounts will not work. The Government could give generic financial advice on the matter, although the Secretary of State seemed unable to do so today, even in broad terms. The key factor, however, is that people's economic interest in investing in the personal accounts must be clear, but at present it is not. I heard some Labour Members expressing concern about that earlier and I hope that the issue will be addressed in the debate.
	I want to touch on a number of other key issues before I return to the question of affordability, on which I know that the Secretary of State will be desperate to intervene on me again. The first issue of concern is the earnings link. The Secretary of State expressed concern earlier when he was questioned about the frustration of people over the delay in restoring the link. Either he has not been getting out and about enough in his constituency or he was being somewhat optimistic about the perception of the Bill across the country. Hon. Members on the Back Benches, who can speak fairly candidly, know that members of the existing pensioner generation are immensely disappointed that the restoration of the earnings link is to be delayed until 2012 or even 2015. I am sure that if the Secretary of State and his Front-Bench colleagues were being perfectly straightforward, they would admit that they were deeply unhappy and embarrassed about the fact that the Chancellor has refused to allow them to make that commitment sooner.
	The Secretary of State must know that millions of those in the existing generation of pensioners could be dead by the time the earnings link is restored. It could take until 2020 to get back to the level of state pension in relation to earnings that existed when these decisions were made in 2006, because until 2012 or 2015 the basic pension will continue to shrivel away in relation to average earnings. I cannot understand why the Government are not more embarrassed about that.
	It was intriguing to hear the Secretary of State's response to an intervention from a Conservative Member about the ambiguity in introducing the earnings link in 2012. He said that the Government could not introduce it earlier than 2012 because of the timing of the increase in the basic state pension age, which implies a link or coupling between the two. However, the Government are dealing with those two things in a completely disconnected way. They have made it absolutely clear that the basic state pension age will be increased in 2024 come what may, even though no commitment whatever has been made to a firm date for the earnings link restoration. If the Government want to delay restoring the earnings link until beyond 2012, surely it is logical for them to consider delaying the introduction of a higher state pension age, too.
	I hope that the Minister for Pensions Reform will comment on the discretion that the Bill allows the Secretary of State to exercise in fixing the average earnings measure that will be used. Perhaps that should not greatly worry us and he will put our minds at rest. As the Bill makes such specific provision, however, and as so many different measures of average earnings could be used, I hope that some clarification will be made.

David Laws: There is no discrepancy. If someone is entitled to a citizen's pension and has paid their taxation, of course they should be entitled to the uprating. The hon. Gentleman cannot, however, justify the Government's proposal under which a British pensioner living in Canada will in future have their pension frozen, whereas a British pensioner living in the United States will get an earnings uprating. Is the Secretary of State happy about making an existing injustice even worse through the restoration of the earnings link?
	I shall make progress, as other Members want to speak— [Interruption.] I hear demands for me to raise other points. If my hon. Friend the Member for Solihull (Lorely Burt) catches your eye later, Mr. Deputy Speaker, she will want to raise some of the issues and concerns about women and carers. The Government could go further on some of those points. I welcome the intervention of the hon. Member for Colne Valley, who picked up on one anomaly that may arise. I also hope that the Minister for Pensions Reform will comment on the issue raised by the hon. Member for Runnymede and Weybridge about the money from scrapping contracting-out of defined contribution schemes and what it will be used for. That is an extremely important question.
	The Secretary of State raised the issue of affordability and the price that we ought to pay for getting the pension system right. Our contention is clear—the Government are building on an insecure and sandy foundation, which will undermine the personal accounts scheme. In that respect, our argument is exactly the same as the Conservative party's, except that we are taking it to its logical next step. We are saying that something should be done about it, rather than simply aspiring, as those on the Conservative Front Bench have done, to finding some money to do something about it in 20, 30 or 40 years' time.
	On affordability, I understand that the Secretary of State must operate within the plans laid down by the Government. It is notable that the Government are seeking to deliver pensions reform while cutting state pensions share of GDP. It is no good the Secretary of State shaking his head—that is precisely what his figures show. That is why we have such a problem with means-testing.
	The Secretary of State needs to pick up on two issues. As he knows perfectly well, we would introduce a citizen's pension using the offset method at about 0.4 or 0.5 per cent. of GDP. That, of course, is a significant amount. The issue, however, is what the consequences would be of not finding the money, over a period of time, to improve the basic state pension. If the consequences are that the entire pension reform programme is undermined, spending such money would be sensible.
	Had we asked the Secretary of State, who was a Health Minister for a considerable period, to comment in 1996-97 on what increase in expenditure would be needed to deliver a decent NHS, he would have been constrained in his answer by the limited commitments made by the then shadow Chancellor. If any of his hon. Friends had suggested that the share of GDP spent on health should increase by 2.3 per cent. over 10 years—five times the amount that we are talking about for a reform of state pensions—he would have regarded such a proposal as idiotic. However, that is what has happened. The Government are spending £65 billion more in cash terms than in 1996-97 on the NHS, and £50 billion more in real terms.
	Anybody can seek to influence the debate and scare ill-informed opinion by waving large numbers around. However, over time, Governments who seek to make a priority out of particular areas of expenditure can do so, as the Government's record on the NHS has shown. If the Government want to find some savings to improve the state pension architecture, I hope that they will adopt exactly the proposal suggested by the Select Committee on Work and Pensions—with the support of the excellent hon. Member for Aberdeen, South (Miss Begg)—and establish a commission to look into the reform and sustainability of public sector pensions.
	The current feeble proposals for reform mean that a Government who propose to cut the share of GDP going into the state pension architecture over the next 15 years are miraculously finding the money to raise the share of GDP to be spent on public sector pensions by 50 per cent. Finding the money to spend on public sector pensions before finding the money to put into the basic state pension architecture indicates a bizarre set of political priorities. If the Minister wants to find money for his reforms and make the pensions system work, he should consider reforming public sector pensions and adopting the Select Committee's proposal.
	Ultimately, the Government must decide whether or not the pension reforms will work, and the biggest obstacle to their successful operation is the extent of means-testing. If the Government do not take account of shared concerns about that problem they may find that while, as in 1975, there is a loose consensus on the principles of reform, it is likely that in 20 or 30 years we shall be looking at a set of reform proposals that have failed to deliver on their basic objectives.

Sally Keeble: My hon. Friend clearly approves of that. Two years later, however, that woman found that she had lost her pension. As a married woman who had worked and been financially independent throughout her life, she was told that she could not have a pension until her husband retired. To say that she was spitting teeth would be putting it mildly. It was she who first brought home to me the level of women's understanding of pensions, or at least their understanding, through bitter experience, of poverty in retirement.
	The Bill will make a big difference, and I am very pleased that for the first time ever the disadvantage inflicted on women pensioners has been recognised by the Government. The Bill would deal specifically with the problem of the constituent who first alerted me to the issue, because it allows women who retire before their husbands to obtain class B pensions without having to wait for their husbands to retire. It will therefore bring direct and practical benefit to a large number of women.
	Other elements in the Bill will right the wrongs that have left so many women pensioners in poverty. At present, one in five single women pensioners risk being in poverty owing to their different working patterns and the impact of child care, widowhood and divorce. The effect of divorce has not been sufficiently recognised. In 2002, 40 per cent. of divorced older women were in receipt of minimum income guarantee, and nearly 63 per cent. of divorced and separated older women currently have no private pension income at all.
	The Bill deals with a number of complex and detailed issues. Several have already been discussed today, so I shall deal with just four.
	Clause 3, an important clause, concerns pension credits for parents and carers. A welcome aspect of the Bill is the extension of carers' ability to claim the credits that they need in order to obtain pensions, but it is important for the new entitlement provisions to be drafted widely enough. That is something that worries carers' groups. Constituents have expressed to me a fear that in its present form the Bill may be too restrictive, as it defines entitlement according to existing regulations or in terms of benefit entitlement, including, in the case of those caring for children, entitlement to child benefit. That means that some carers may miss out. It might be more constructive to replace or supplement the proposed arrangement with a system of certification by local authorities. There would be logic in that, as local authorities—through the director of education and children's services, and through social services departments—are responsible for commissioning care for children and vulnerable adults. They would therefore be able to issue certificates identifying the carer and the amount of care being provided.
	Let me give an example that has arisen a number of times in my constituency. There is a high level of employment among my constituents, and women have traditionally worked. My constituents are also very family-orientated. If—unfortunately, this is a frequent reason for family breakdowns—a lone mother has become involved in substance abuse or her physical or mental health collapses, the grandparents will often take in her children and, in many cases, care for them into adulthood. In some instances, a grandmother who is still of working age must give up her job. In others, the grandparents will not obtain the child benefit book. Not wishing to bother with the bureaucracy of having it altered, they may deliberately leave it with the children's mother to maintain a link between her and her children, and perhaps also to encourage her to think about getting the children back.
	I understand that, in such a case, a grandmother would not be able to obtain credits towards a pension because of the work that she had done in caring for the children, unless she could qualify as a foster parent. I have contacted social services departments on several occasions about the possibility of securing foster payments for grandparents, but I am not sure that they could qualify as foster parents, which is what I gather the legislation requires. Carers who look after a number of different people for shorter periods would not qualify either, unless the hours were right. Moreover, carers would have to be claiming the right benefits. Disability living allowance must be at the higher or middle rate, not the lower rate. Parents, or in many cases a lone parent, with a number of children receiving the lower rate would have to stop working to look after them.
	I hope that my hon. Friend the Minister will give some indication of Government thinking, and will say whether he is prepared to consider the possibility of local authorities' being able to issue certificates stating who is or is not a carer. We certainly need some way of ensuring that people with a valid status as carers can obtain support without having to be in receipt of all the right elements of benefit.
	Another issue that has often been raised with me is not addressed in the Bill. Overlapping benefits and entitlement to mobility benefits affect pensioners generally and also carers, but the Bill is silent on them. I wish to discuss two particular points, one of which is pensioners' rights to carer's allowance, the entitlement to which currently ends at retirement. I hope that I am correct about the technical points on this matter, but if not, I am sure that my hon. Friend the Minister will put me right. The withdrawal of that allowance means that pensioners caring for disabled spouses or for children do not get support for performing that caring role. The theory is that because carer's allowance reimburses people for lost income as a result of their caring, it is not appropriate for pensioners. However, for people in that situation it appears simply that once they hit retirement age recognition of their caring role is lost—as is the fact that such caring is, indeed, work. I presume that when the state retirement age increases, the entitlement to carer's allowance also increases, but I would appreciate clarification on that, and also on whether there might be any relaxation of the rules in respect of pensioners' rights to access carer's allowance. I have written on several occasions to the Department about the issue, which continues to be a source of considerable grievance to many of my constituents.
	The second issue to consider is the ability of pensioners to get the mobility component of disability living allowance. Once people start receiving pensions they get attendance allowance rather than DLA. That restriction is bitterly opposed by my constituents. We enjoy greater longevity and have increased expectations of a good quality and standard of life when we are older; my constituents—in common with those of other Members—expect to remain mobile until they are much older than did previous generations. I visited a constituent at home shortly after she had had, at the age of just over 60, both of her legs amputated. She was refused any help to get mobile. She had been used to driving and had previously led a mobile and active life, but just because she was retired, she was told that she would not get as high a level of support as she might otherwise have received. That was difficult for her to accept. Will my hon. Friend the Minister say whether any further thought is being given to such support for pensioners?
	On the entitlement of part-time workers to pensions, the reduction in hours worked for people to qualify for state pension is very welcome. As a result, many more women will be entitled to the state pension. Despite what the hon. Member for Runnymede and Weybridge (Mr. Hammond) said, it would have been wrong to have dramatically improved the value of the state pension when that would have left so many pensioners still in poverty simply because they are women and so they do not get the state pension at all. I look forward to the value of the state pension being increased once the proposed changes are in place. Those changes will also mean that more people—up to a total of 70 per cent. I think—are included in the state pension net.
	There is still an outstanding issue related to the qualification of part-time workers. Many women in my constituency make up their working week by working a number of shifts for different employers—working flexibly to meet their family commitments and their financial needs. That has been of benefit to the local employment market and the local economy, as well as to local families. Some such women might work eight hours for one employer, eight hours for another and four for another, and yet they still might not qualify for a state pension. Will my hon. Friend the Minister look at the possibility of easing up on the rules so that more part-time workers are able to qualify for the state pension?
	My final point, which overlaps with those made by several other Members, is to do with the provision of information and the personal accounts delivery authority, which the Bill will establish. I welcome that, and I regret the early efforts to undermine a new savings scheme for pensioners that should give people the cornerstone for independence in their retirement based on the savings that they have made during their working lives. That is the right way to proceed, and the loss of that linkage has been profoundly damaging to people's security in retirement. It is also right that the scheme should be compulsory—which would mean, of course, that there would be auto-enrolment. But there is a caveat. In the past, people have asked me what sanctions might be imposed on those who do not make private provision. However, there must still be a secure safety net for people who are not able to, or who, for one reason or another, do not, make private provision. The Bill provides only for the outline establishment of the authority—the detail will come later—but I ask the Minister to comment on how the difficult issue of information and advice will be handled.
	Every time that there has been a major problem with pensions, usually the heart of that problem has been to do with the provision of information—not merely the detailed advice on what people should get, but the basics of the information. The pensions miss-selling scandal, for which the Conservative party was responsible, was largely to do with Government advertising that encouraged people to take out private pensions. I remember an earlier debate in this House when those advertisements were waved around and their terms were read out. The widows' state earnings related pension scheme debacle—constituents of mine provided one of the test cases considered by the ombudsman—also centred on the provision of information and whether people were given notification about the changes at the right time.
	Recent problems with occupational pensions have also been caused by issues related to the provision of information.  [Interruption.] Yes, I take on board the point that the hon. Member for Hemel Hempstead (Mike Penning) makes. One of the issues that got women into pension difficulties was the married women's stamp and what information women were or were not given when they signed up to it. A steady stream of women have come to my advice surgery saying that when they signed up for it they did not understand that that meant they would not get their own proper pension. I have looked into that. Employers have provided forms that show that the women had the necessary information and that they ticked the boxes and signed the papers, but many women argue that they did not understand what they were doing when they signed for that stamp. In my first jobs, I had the married women's stamp, and I know exactly how it felt to sign something and then later to find out that I had, to an extent, signed away my future.

John Butterfill: I am very gratified by the Minister's response; there could otherwise have been a lot of wastage of effort and expertise.
	I have some concerns about the reforms to the second state pension. The earnings-related element is set to disappear. It was said earlier that that will not be unfair to above-average earners because they will get the same as everybody else, but they will surely be paying more, so at the end of the day they will be paying more for less; I do not see how that can be avoided. I am also concerned about the effect on defined-benefit schemes, which will suffer from the lower contracted-out rebate. They are already in some difficulty, and not everything that the Government have done to date has encouraged the companies that provide such schemes. The reforms will make life rather more difficult for them, which I would have thought was the last thing that the Government wished to do. At the same time, the take-home pay of their employees will be reduced. Those two things make that particular element of the second state pension reforms rather difficult to understand.
	On guaranteed minimum pensions, I am delighted that the Government are getting rid of this extraordinarily complex and contentious regime. Employers have made many mistakes with GMP, and the advice given by lawyers has often been contradictory. I am sorry to say that the advice given by the National Insurance Contributions Office has also sometimes been wrong and contradictory. That even happened with the House of Commons scheme, which I have the honour of chairing, so anything that reforms GMP will be a good thing. However, the initial reform proposals look extremely complicated, and I hope that they can be made as streamlined as possible. If we can in some way get rid of the whole thing in one fell swoop and remove the burden from employers, that would be welcomed by everybody I know in the pensions world. The situation on the abolition of contracting out for defined contribution schemes is different and, on balance, will probably be a good thing. It is the defined benefit schemes that I am worried about.
	All the hon. Members who have spoken today have welcomed the return of the link to earnings of the state pension. It must be a good thing, but there is still some suspicion about when it will occur. As others have said, the promise is rather vague. Will it be 2012 or might it be 2015, or will it just disappear into the ether and never occur? The Bill does not contain a firm commitment to the establishment of the link.
	We also need to know how average earnings will be calculated. We are told that it will be done by the Secretary of State, but how will he do that? Will a detailed system of calculation be laid down in some annex to the Bill? After all, calculations of average earnings by different experts all come out different.

John Butterfill: My hon. Friend is right. It would reassure many people if we had more certainty on this issue. It would also reassure many people if the calculation of average earnings was done for the time being by some independent authority, rather than the Secretary of State. Otherwise, it would be open to future manipulation and we know that that has happened under Governments of all complexions. An independent calculation of average earnings would therefore reassure us all.
	The Government have been a bit timid on changing the state pension age. I said that when the White Paper was published and when Turner made the proposal. It would be possible to compress the timescale proposed in the Bill, so that the changes would happen earlier. I know that the Government have said that the equalisation of pension ages between men and women is dictating the timetable, but I disagree. It would be possible to compress the timetable and achieve considerable additional savings by so doing, which could provide cash to abolish some of the means testing that people are so concerned about—especially the Liberal Democrats. Their solution seems to be, "Well, the Government spend lots of money on everything else, so why not spend lots of money on this?" Liberal Democrats are prone to saying that, but if we compressed the timetable, we could find some money to help in getting rid of means testing.
	The proposal is to wait until 2044 and 2046 to change retirement age to 68. Well, the US already has a retirement age of 67, as does Scandinavia. For us to wait almost another 40 years to make the change to 68 is very unambitious. If others can go faster, we should too, and there are great savings to be had by doing so. Indeed, with the improvements in medical science and the resulting increases in longevity, it may not be impossible to change the retirement age to 70.

John Butterfill: I understand the hon. Gentleman's point, but the medical profession and improved education can help. It is not an insuperable problem and I am not sure that we should be prevented from doing something that would benefit the nation as a whole—including a high proportion of the hon. Gentleman's constituents—simply because of disparities in health outcomes.
	Pension credit is a difficult problem. Even on the Government's figures, one third of pensioners will still be claiming pension credit by 2050, and we need to do everything in our power to try to eliminate means testing. It has a high administrative cost and we also need to restore dignity. Most of my constituents who claim benefit would much prefer not to have to do so and the elimination of means-tested benefits, wherever possible, should be an objective for both sides of the House. I have given one example of ways in which we might be able to save enough money to enable us to do that.
	The Minister will recall from my Adjournment debate on 2 November that I am delighted that the Government are making changes to the home responsibilities protection provision. The changes will be good for parents and carers, and 20 hours a week is a reasonable requirement. The Minister will remember from my Adjournment debate that I am concerned about how the 20 hours will be defined. Who will provide certification? In many cases, the time spent by carers is difficult to measure. Perhaps we should require a medical practitioner to say that a particular patient needs at least 20 hours of care, as that would be preferable to requiring carers to prove that they provide 20 hours of care.
	The system must not be too hard and fast, as hours of care often fall at different times of the week, according to the arrangements that families make for looking after sick and elderly relatives. Carers perform an enormous duty for their own kith and kin that greatly benefits the country as a whole, and we must make it as easy as possible for them to make a legitimate claim.

Anne Begg: Not every Bill does everything for everybody. This Bill is about tomorrow's pensioners, and was never intended to be about today's. As it turns out, greater longevity means that it will affect today's pensioners, as some of them will still be alive to benefit from its provisions.
	I am pleased to say that the Bill will be of particular benefit to women, and that is what I want to concentrate my remarks on, but women who have retired already believe that the introduction of the pensions credit has been a great help. The Government have come a long way since their election in 1997, when they inherited an enormous problem of pensioner poverty. Only 10 short years ago, pensioners were dying from a lack of food and heat in the winter. Then, being a pensioner very often meant living in poverty: now, pensioners—or old people as a whole—are no more likely to live in poverty than members of the general population. That is a remarkable turnaround, and shows what a huge effect the shift in public policy has had.
	That shift began with the introduction of the pension credit. I make no apology for the element of means-testing involved, nor for the steps that the Government took in introducing it, as the policy was absolutely correct. My hon. Friend the Member for Northampton, North (Ms Keeble) was right to say that increasing the basic state pension or restoring the link with earnings would have had no impact on the poorest pensioners, or on the 1.5 million women who did not qualify for the basic state pension.
	Urgent action needed to be taken, and that is what the Government did in the years immediately after 1997. The pension credit lifted 2 million pensioners out of absolute poverty and more than 1 million out of relative poverty, and the Government now have a breathing space. They are therefore able to look at tomorrow's pensioners, including those women who have yet to retire, to see what needs to be put in place so that they can benefit from the basic state pension. That is what the Bill is about—making sure that more and more women will qualify for the basic state pension when they retire. The Government have chosen to achieve that aim by reducing the number of years needed for eligibility for the basic state pension and by changing the qualifications, especially for carers.
	The hon. Members for Runnymede and Weybridge (Mr. Hammond) and for Bournemouth, West (Sir John Butterfill) both talked about the cliff edge for national insurance contributions in 2020, when, depending on a woman's age, she could be just one day short of benefiting from the 30-year contribution period. Both cited the number of women who would be affected by the change, but that is not necessarily the number who will be disadvantaged by it. The figures do not take into account the fact that a large number of those women will already be receiving pension credit, so the level of the basic state pension or its contributory elements will not matter; almost all their pension will be made up by pension credit. None the less, I urge the Government to look into some form of smoothing mechanism, to make sure that the cliff edge is not so absolute. However, I accept that there has to be one at some stage; there has to be a specific day when the qualifications change.
	I had planned to speak about the more generous carer's credit, but my hon. Friend the Member for Northampton, North went into detail about the definition of a carer in her speech. She set out how a carer could qualify for credits towards contributions to the basic state pension. However, I urge the Government to consider how different caring roles can add up to the 20 hours a week set as the threshold. Eligibility should not be dependent on only one job; for example, women of my age who have looked after their children may have gone back to work but dropped out again in their 50s to look after grandchildren and an elderly relative. The individual elements of such care might not add up to 20 hours, but in combination they could easily do so.
	The hon. Member for Bournemouth, West suggests that GPs should make judgments about care for people with disabilities or ill health. I have to disagree: GPs are not qualified to make judgments about the amount of care an individual needs. They can determine whether someone is ill and what medical care they need, but I do not think they would welcome having to make judgments about social or personal care; it is not in their remit. I say that as someone with a disability. Just because a doctor may be able to diagnose my condition, they do not necessarily understand its effects on how I live my day-to-day life. Putting such matters into the hands of GPs makes them medical rather than social judgments.

John Butterfill: Of course, I understand that a wide range of people could make such decisions; I merely suggest that GPs could be one of them. I am reinforced in that view by a case that I discussed with the Minister in November, in which the GP was prepared to put in writing his view that the patient needed at least a certain quantity of care over a week. There will be variations from case to case, but in some cases a degree of medical knowledge, which a social worker might not have, would be essential in evaluating the situation. We need a range of expertise.

Anne Begg: Indeed, and we need to ask GPs if they would be willing to take on that role. The Government should not land things on various professionals without asking their opinion; they need to be engaged in the debate.
	Everything in the Bill that makes it easier for women to build up their national insurance credits is to be welcomed. As those provisions are implemented, and more and more women begin to qualify, it will make sense to restore the earnings link to the basic state pension. I regret not that we did not restore the link, but that the pensions debate has been sidelined into that narrow category. It made for an easy slogan, but there was not always full understanding of what restoring the link meant. When I spoke to pensioner groups, I discovered that they had different interpretations. Some, like the Government, thought it meant restoring the annual upgrading to match the annual increase in earnings. However, some pensioners thought it meant making sure that the basic state pension was a percentile of the average wage, while others thought it meant they would receive backdated payments amounting to what would have been paid in the annual uprating from the date when the link was broken to the day it was restored.
	Those who were crying—a very Scottish word that means "call"—for the restoration of the link may not all have been calling for exactly the same thing. The Government should make it possible for almost everyone to qualify for the basic state pension. The contribution need not be monetary, as it obviously is in the national insurance scheme; it could be social, based on the time people have given in their caring role. The wider the Government can spread the net, to ensure that as many people as possible qualify for national insurance credits, the wider the coverage of the basic state pension and the more sense it will make to restore the link. Before we even consider restoring the link, we have to make sure that it is as easy for women to qualify for the basic state pension as it was, in general, for men; otherwise we shall merely have expanded the inequalities inherent in the existing system.
	I urge the Government to go slightly further than the Bill proposes—I hope that the Liberal Democrats will be pleased with my suggestion. The hon. Member for Yeovil was correct to say that I would have preferred a universal pension. That would be the ideal, but I accept the reason why the Government have not, in the short term, used residency to determine who should qualify for the basic state pension. There are difficulties in defining who is resident because the data have not been collected. It will take some years to build up the database, so it is more sensible to adopt the proposal in the Bill and reduce to 30 the number of qualifying years for the basic state pension. That will achieve the same outcome, but much more quickly.
	Perhaps to the disappointment of the hon. Member for Yeovil, the universal pension that I envisage would be at the basic state pension level. We need a means of getting the necessary coverage so that everybody who has lived in the UK for 15 or 20 years will receive the basic state pension. The Liberal Democrats and the Scottish National party propose a citizen's pension, but it is unaffordable as it is tied into somehow—I am not sure exactly how they are going to do it—eliminating means-testing.
	I thought that I understood the citizen's pension until I heard today's debate. I had thought that it would be set at a sufficiently high level to minimise, though not eliminate, means-testing and that the qualification would be based on residency. If that were the case, those who had previously paid national insurance contributions in the UK, but now lived abroad, would qualify for the citizen's pension. However, the hon. Member for Yeovil said that they would not, so I do not know whether the citizen's pension is based on residence or contributions or what. It cannot be both, so we need to be much clearer about what it would be based on.

Anne Begg: I still do not know how many years are involved, so perhaps the hon. Member for Yeovil will intervene again to clarify whether it is 10, 15 or 20 years. If it is 10 years, it means that anyone who has lived in Britain for 10 years and then moves anywhere else in the world will qualify for a full citizen's pension in the UK—even though they spent only 10 years living here and are no longer living here.  [Interruption.]

Anne Begg: So what of married women who run off with some toy boy who is American and has never paid national insurance contributions? Just because someone is resident in the country does not mean that they are paying national insurance contributions, so we are back to the same problem. Part of the reason for the Bill is that not everyone was qualifying under the contributory principle. What Lord Turner proposed was not the citizen's pension as devised by the other political parties, but one as an element of a universal pension. It was not based on the contributory principle. The two are different.
	To return to my earlier point, as we expand the net of qualification under the contributory principle through national insurance contributions—or, indeed, through credits, which should satisfy my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones)—it may become sensible in future for residence to become an easier means of identifying those who should receive a basic state pension. At the moment, that is not possible and it will continue not to be possible in future unless at some stage the Government begin to collect the data that would allow people to prove their residency. If that were part of the Bill, it would allow future Governments to decide whether to change the basis in years to come—without having to redesign the architecture of the basic state pension.
	If we are talking about a pensions system that will last well into the century and for the next 50 years, it may make sense to give future Governments the flexibility to make that choice if they so want. I urge the Government to look further into that.  [Interruption.] I am pleased to hear the agreement of the hon. Member for Yeovil about that; it may be one of the few things that we agree on. My proposals are practical, but unfortunately the introduction through the Bill of the citizen's pension tomorrow would not be possible and I accept the Government's reasons why it would not.
	I have spoken much longer than I intended to. My final point is a matter of concern to me, which is why I tried to intervene on the hon. Member for Bournemouth, West. The hon. Member for Angus (Mr. Weir) has already put forward the arguments that I would have made if I had been able to intervene. I had serious concerns about the raising of the state retirement age. It may be because I was born in 1955 and, as a female, will be the first of my generation not to receive her state pension until she is 65. Perhaps that concentrated my mind. I suspect that the hon. Member for Bournemouth, West is slightly older, so perhaps that is why he suggested raising the retirement age much sooner. It may be easier, as it will not apply to him or his generation.
	I had serious concerns, as do a number of the trade unions, about the raising of the state retirement age simply because of the different demographics throughout the country. Where many men have worked in heavy industry and lived in the most industrialised parts of the country—Glasgow is a good example—the average life expectancy can be as low as 59. People die before they even reach the current state retirement age. I have to say that that is not just a matter of geography or education, but more a consequence of poverty. Unless the Government can ensure that the next generations do not live in poverty—the Government's avowed aim to lift children out of poverty by 2020 is crucial—the children born in poverty today will not enjoy the same longevity as those born to middle class parents. We must ensure that we lift those children out of poverty so that they can live as long as their more affluent neighbours—and the job has to start now.
	The package of proposals from Lord Turner included the raising of the state retirement age, and part of building a consensus is that individuals involved in the process have to accept some things that they like less than others as part of that overall package. That is what consensus building is all about—recognition that some parts of the population do not like certain aspects, but they should nevertheless agree to them if they are acceptable and will work for the vast majority of the population. I have thus swallowed my objections to raising the state retirement age, though the long lead-in time is absolutely right and it is dependent on the Government getting their public health policies and their anti-poverty strategy right. It will affect only people younger than 47, who will have the chance to enjoy the same benefits after retirement as everyone else.
	I have taken up quite a long time. I welcome the Bill and I look forward to the following Bill on savings accounts. I raised the issue of the trivial commutation level with Secretary of State. Getting that level right will be important in answering some of the concerns that the Liberal Democrats have expressed about whether it will always be right to save and whether there will be some—again they will predominantly be women—who may not benefit as a result of small amounts of saving. If we get the trivial commutation level right, being able to take a lump sum, without affecting means-tested benefits, would help to answer some of the questions. This is a good Bill and I am delighted about the change that it will make in the lives of women. They will be able to contribute to, and will qualify for, a basic state pension and they can look forward to a level of income that means that they will be able to enjoy their old age and the years that they have to live beyond retirement age.

Quentin Davies: I congratulate my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) on an excellent and thoughtful speech. It showed, not surprisingly, that he has a considerable grasp of the subject. He showed good sense in accepting formally on behalf of my party the Government's pension credit system, which I think we should accept. However, in all frankness there was one matter on which he did not convince me and I want to touch on it briefly. It is quite useful for these matters to be discussed in public in time to influence the second Bill—the personal accounts Bill.
	The matter is that of the limit on contributions to personal accounts when they come in. My hon. Friend said that the Government were wrong to have a limit of £5,000 and that we should have a limit of £3,000—if I caught what he said correctly. I cannot see why we need a limit at all. The object of the operation is to encourage people to save and to maximise general savings and particularly long-term savings—savings designed to produce an income in retirement. It therefore seems to me that if anybody, whatever their circumstances or level of income, finds that when personal accounts come in they are the right vehicle for them and are a better deal all things considered—including the lower fees that we have been promised, which are an important aspect of the return available on any investment—I see no reason why that person should not come in with any amount of money, whether it is £3,000, £5,000 or £10,000 a year, if they want to and can afford that. We do not have running Revenue limits any longer; we have one global lifetime limit from the Revenue. That means that there is no reason on those grounds to have a running limit. No doubt we shall have to come back to that matter when the second Bill is introduced. I hope that we have some debate in advance of that Bill being drafted, because I am not sure that either my hon. Friend or the Government are on the right lines in thinking in terms of limits.
	I feel strongly that when we are designing a national public service such as a pensions system for the future, the House should not be in the business of taking into account the interests of a particular industry. We are not in the business of designing a pensions system for the future to suit the pensions industry. The pensions industry does a tremendous job and I have no reason to say anything against it as a whole. It is a large industry and includes independent financial advisers, pension funds, actuaries and so on and so forth. However, I do not accept that a limit should be imposed on the maximum contributions that can be made to a personal account simply because of the danger that, if there were no limit, undue competition would be created for other parts of the pensions sector. The creation of competition is a benign and good thing and should not be artificially restricted.
	There are many welcome things in the Bill and I agree with much of what has already been said on the subject. There is one thing that I regret, although it may be a bit late to alter it. There are a couple of things that could be, and should be, changed, and I trust that that will happen in Committee. There is also one overshadowing problem that the Bill does not recognise and I want to dwell on that at slightly greater length.
	I regret that we are taking so long to restore the earnings link. It was rightly said by a Scottish nationalist earlier that we are not actually restoring the earnings link—we are not restoring anything, because the system that prevailed until 1981 was a link to earnings or prices, whichever was the higher rate of increase. There was no choice about it. We are not restoring that; we are creating a new system, which for the first time is an earnings-linked system. That point aside, it seems a great pity, largely for reasons that have already been mentioned, that we cannot bring forward the introduction of that new system. The people whose interests the House ought to be most attached to—the oldest people of all; the world war two generation—are most unlikely to benefit if the earnings links does not come in until 2012 or even 2015.
	I recognise that we must maintain the fiscal viability of any measure that we pass through the House. I would be in favour of bringing forward the increase in the retirement age. I am in favour of bringing forward a rise from 65 to 66 perhaps in the next year or two, and then bringing forward a rise to 67 much more rapidly than the Government envisage. As several people have said, there are other countries—I would add Germany to the list already mentioned by my hon. Friend the Member for Bournemouth, West (Sir John Butterfill)—that already have a pension age of 67. I see nothing shocking about that. The Government have missed an opportunity—they could have done both things in a way that would be acceptable to the Chancellor, who I know is an overbearing presence on the Department for Work and Pensions. They seem to have missed that trick.
	There are two more minor matters that I hope can be addressed in Committee. This is an obvious case of where we should just polish the existing text. There have been calls for that already from both sides of the House. I am sure that the Government, who are in a reasonable, consensus-seeking mode, will have taken account of them. However, one issue is the moment of introduction of the earnings link and, later on, the moments of introduction of the new retirement age, which will increase from 65 to 66 and 66 to 67 and so forth. As things stand, appalling unfairness will be created. The other issue, which is important, is the introduction of a new system under which 30 years of contributions will qualify for a full pension, rather than 44 and 39 years, which is the rule at present. The Government propose to go in one jump, on one day—6 April 2010—from requiring 44 years, or 39 years in the case of women, to 30 years. As has already been said, somebody who is 65 on 5 April 2010 will find that he or she has a pension that is considerably less than somebody who happens to have been born a day later and becomes 65 on 6 April 2010. If someone loses out on roughly a third—that would be the gap between 30 years and 44 years—of his total pension entitlement, which is about £84 at present, that would mean that he was losing about £27 or £28 a week simply by virtue of being born on one day rather than another. That cannot be right. Similar unfairness and anomalies will be created when the new retirement ages come in if the whole of the disbenefit is suffered on one particular day.
	The Government seem to have forgotten entirely about the concept of a taper. Whenever we make changes to the tax or benefit systems that have a significant, long-term effect on people's earnings, they should be phased in or tapered, simply out of sheer humanity. That would be the way to pre-empt the great sense of injustice that will otherwise pollute the new regime from the very moment of its introduction, which would be a great pity. I do not know whether I will be lucky enough to be selected to serve on the Public Bill Committee. If I am, and if no one else proposes an amendment along the lines that I have suggested, I will do so myself. However, I trust that the Government will propose such an amendment to deal with the problem.
	My main worry is the overarching problem with which the Bill does not deal, namely, means-testing. There is no question at all that in the present circumstances, and in the circumstances that can be foreseen when the Bill reaches the statute book, there will be a large number of people who will have no motivation to make a voluntary pension contribution by way of a personal account or any other means.
	Way back in the 1997 Parliament, when the Government first introduced the minimum income guarantee, which was the predecessor of the pension credit system, I happened to be my party's spokesman on pensions. At that time, I made the calculation—I think that that was the first time that it had ever been made, and it appeared in the following day or two in not just the specialised press, but the general press—that a person would need to save for a capital sum on retirement of £80,000, on the values of that day, to gain even one penny's benefit from those savings from a modest income. At the time, £80,000 would have yielded an income of £5,000 a year on a 6 per cent. annuity, and £5,000, on the assumptions that I set out to the House—no one quarrelled with them—was the average value of the benefits that could be received in addition to the maximum state retirement pension, particularly housing benefit, council tax relief and the minimum income guarantee supplement. On the assumption that the person concerned had a full contributions record, I calculated that all the £5,000-a-year annuity benefit would be completely foregone because it would equal the amount of means-tested benefit available to that person.
	Things have moved on since I made my calculation. The pension credit is worth more than the minimum income guarantee was at that time, and rents, and thus housing benefit, are somewhat higher. The relevant figure in the calculation is now certainly more than £100,000. A person would have to save more than £100,000 for there to be any benefit on retirement from those savings, if he or she was on a low income and otherwise eligible for means-tested benefits. That is a horrifying thought because to save an amount yielding a capital sum of £100,000 at the age of 65 would represent a pretty heroic savings effort for someone on a small income.

Quentin Davies: The hon. Lady misunderstands my logic and what I am trying to say. She certainly misunderstood what I said when I first made the point about eight years ago. I am comparing like with like—I am comparing comparables. For the purposes of my calculation, I am assuming that someone has a full contribution record and thus receives the state retirement pension. The question is whether that person will get anything more than that pension.
	The figures have changed a bit since I first made my calculation, although not by much. At that time, the minimum income guarantee would have provided £20 a week more than the state retirement pension. Housing benefit typically would have provided about £50 a week, although now the figure would be £60 or £70. On top of that, council tax relief would have provided perhaps £10 a week, although the amount would now be £20 a week because of the dramatic rise in council tax since then. People at that time would thus have been entitled to some £5,000 a year by way of means-tested benefits on top of their state retirement pension, because, as I am sure that the hon. Member for Aberdeen, South (Miss Begg) knows, if people have only their state retirement pension to live on, they automatically get council tax relief, housing benefit and the minimum income guarantee—now the pension credit. All that benefit would be foregone by people who had some £5,000 of retirement annuity on top of their state retirement pension.
	If one does the calculation today, the figure is rather higher, given that the value of the benefits has increased, so the capital sum needed from which to purchase an annuity on retirement would now be more than £100,000. If, after cashing in a capital sum of £100,000, a person had £6,000 from a retirement annuity as their only income in retirement, apart from the state retirement pension, they would find that they had wasted the whole £100,000, because the £6,000 that would be received would disqualify them from the means-tested benefits that they would otherwise get. There is thus a break-even point, which is now slightly more than £100,000, at which savings give absolutely no return.
	I ask the hon. Member for Aberdeen, South not only to follow that logic, but to bear with me and go to the next stage. A person who had saved £200,000 would receive a return from that by way of an annuity that would be exactly half what the market return would be. In other words, that person would receive half what the market would regard as a reasonable return for deferring consumption throughout a lifetime and undergoing an investment risk by saving money. It is not unless a person expects to be able to accumulate an amount considerably in excess of £200,000 in a retirement fund with which to purchase an annuity on retirement that it becomes worth while to think about making personal pension contributions.
	I am afraid that that is the overshadowing reality, and it means that someone who does not expect to be able to save that kind of money would almost certainly be much better off consuming their income—spending it on enjoying their life and doing what they want to do—rather than saving it, because they will know that when they reach 65 they will get not only a full state retirement pension, but the full pension credit, in addition to housing benefit, council tax relief and the other means-tested benefits to which they may be entitled. Such an uncomfortable reality means that anyone giving honest advice to a person in such circumstances would have to say, "How much do you expect to be able to save in your lifetime? If you can't save beyond £200,000, it really isn't worth it."
	Just imagine the effort required for someone with an income of under £20,000 a year, or even £25,000 a year, to save a sum that would, on reasonable rates of return, amount to £200,000, £250,000 or more on retirement. It would be an heroic effort, and that heroic effort would almost certainly yield a derisory return. People who earn much more substantial amounts of money might be able to put aside £5,000, £10,000 or £15,000 a year, and for them it is very worth while to save that money, but unfortunately it is not worth while for others to do so in present circumstances, and the Government have hardly changed that at all. We must all be concerned about that.
	The Liberal Democrats identified that problem and have come up with a solution that everybody else regards as simply not financially viable, and I share that view. Their solution is not realistic; it is funny money, and it is not a sensible way of moving forward. We must be able to afford what we propose for the British public. An alternative used elsewhere is compulsion. The hon. Member for Northampton, North (Ms Keeble) mentioned the Australian superannuation system, which I have considered, and it is an attractive system that runs extremely well. Compulsion means the state telling everybody that they will have to pay for what they receive in retirement. No doubt there is a means-tested safety net, so that people do not die in the gutter if, for one reason or another, they manage to avoid saving any money through the compulsory scheme. Nevertheless, in such a system, what people receive on retirement is seen to be the direct result of the compulsory saving. That, of course, was the original basis of the Lloyd George proposal introduced in the House exactly 98 years ago. Compulsion has not been mentioned at all in today's debate, although just about every other aspect of the subject has been. It is something to which we will almost certainly have to return.
	There are great problems with compulsion. People will say, "I'm compelled by the state to save; the state is forcibly extracting a certain amount of money from my salary. Even though it is supposedly being saved for my benefit, I regard it as a tax. It is an imposition and it is not voluntary." I quite understand the political sensitivity of the matter. It would be a brave Government who decided to introduce compulsion, but I do not think that we should exclude the idea. I am not urging my hon. Friends to include the proposal in our next manifesto, but we should not exclude the idea from the debate, just as it has been excluded, slightly artificially, from our otherwise detailed and multifaceted discussion this evening.

Janet Dean: I promise to be brief; otherwise my voice might give out. I greatly welcome the Bill, particularly the measures that will benefit women and carers. The reduction of the number of qualifying years to 30, and the introduction of weekly credits in place of the current home responsibilities protection, will increase the percentage of women who will be entitled to a full basic state pension. Of course, we should recognise that home responsibilities protection already brings benefits to many women, even though it is more restrictive than the proposed credit system. However, I will raise one problem with HRP that I hope will be avoided under the new credit system, and I hope that Ministers will consider how those affected by the problem can be helped.
	In August 2005, I was contacted by my constituents, Mr. and Mrs. Cartwright, who discovered when Mrs. Cartwright received a state pension forecast that she had not been awarded home responsibilities protection. When my constituents questioned that, they discovered that their child benefit, which they had claimed since 1984, was deemed to have been paid to Mr. Cartwright, even though it was paid into their joint bank account. When they applied for child benefit, Mr. Cartwright's name was put first on the application form, for no reason other than that his name appeared first on the bank account. He was therefore treated as the recipient of child benefit, and that qualified him for HRP. I believe that that may be a significant problem now that child benefit is paid into bank accounts. It would never have arisen under the old system of payment books, in which it was clear that it was the mother who received the benefit.
	Mr. and Mrs. Cartwright should have received form CH718 for Mrs. Cartwright to complete, which would allow her to give her permission for Mr. Cartwright to receive child benefit and therefore the HRP. My constituents do not believe that they ever received that form, and the Child Benefit Office is unable to provide copies of returned forms. The onus is on the claimant to prove that they never received the forms, which is impossible after 20 years. There seems to be confusion on that point. My recent inquiries revealed that the rule is that if no completed CH718 form is received, the claim from the husband should be disallowed. However, while making representations in 2005, a member of my staff was told that although the forms are sent out, if they are not returned, it is assumed that the claimant received them, and that the first named person on the form is accepted.
	Whatever happened regarding the form more than 20 years ago, it is clear that no one would knowingly waive their right to home responsibilities protection when they had been caring for their children and not working. My constituents were certainly not aware of the implication of putting the husband's name on the claim form and the effect on the entitlement to HRP. It is difficult to find out how many people may be affected by the problem, and it is probably only when people draw close to retirement age and receive a pension forecast that we will know the true extent of the problem. Certainly, both my assistant and my constituents have been told by the National Insurance Contributions Office that it knows of many such complaints.
	The Pensions Advisory Service produced a document entitled "Report on Women and Pensions Helpline", which was the result of a pilot helpline available from 18 October to 10 December 2004. The report states:
	"A recurring comment from many callers was that they were unaware of, or confused by, HRP and how it may apply to them."
	It says:
	"Particularly relevant for couples, is the fact that HRP is only automatic when the child benefit is being paid to the non-working partner. Some enquiries came from individuals where the child benefit was being paid to the working partner rather than the partner who had given up work or was working reduced hours to look after the couple's children. We were able to advise why they should be changing the payee details for the child benefit."
	I recently contacted the Pensions Advisory Service and was told that about 500 calls to the helpline concerned the subject of HRP, and the main problem was lack of understanding of how the system works. The issue highlighted in the report of the "wrong" partner receiving child benefit mainly concerned cases in which men stayed at home to care for the children, and due to ignorance of how the system works, their child benefit was paid to the mother, even though she was the working partner. As a result, the stay-at-home husband did not qualify for HRP.
	Whether it is fathers losing out on HRP because they stay at home to care for their children, or mothers such as Mrs. Cartwright missing out because the husband's name was inadvertently put on the form first, the situation is clearly ridiculous. No one would willingly lose some £32 per week in pension entitlement. In such cases, it should be reasonably easy to establish that the working parent has paid tax and national insurance during the years in which they were eligible for HRP, whereas their partner has not. It would therefore seem possible to transfer the right to HRP in those circumstances.
	I am grateful to my hon. Friend the Minister for Pensions Reform for meeting me to discuss my constituents' case. I hope that amendments to the Bill will be considered, so that we can address the problem that affected Mr. and Mrs. Cartwright and, I believe, many more people throughout the country.

Judy Mallaber: For too long, women have had a raw deal from the pensions system, which may explain why women have been out in force on the Government side during the debate. Only a third of women retire with a full state pension. One in five single women pensioners risk being in poverty in retirement.
	Yesterday, when I went to the relaunch of the British Heart Foundation shop in Alfreton in my constituency, there was a murmur of great approval from the older women volunteers when I said that I intended to speak about women and pensions in the House today. It resonates with women that the issue must be sorted out.
	Women must be at the heart of pensions review and reform. If we get it right for women, we will get it right for everyone else as well. I make no apology for going on about women again, or for repeating my request to those on the Front Bench to reconsider the proposals to re-examine the position of part-time women workers and the definition of carers. I repeat the pleas of my colleagues on those matters.
	I am proud to support the Bill. My right hon. Friend the Secretary of State pointed out that it is the biggest reform of our pensions since Clement Attlee's post-war Labour Government implemented the Beveridge report. It has not been spelled out, but it is obvious that those reforms were based on a traditional model of a one-earner family, in which the man was the breadwinner, with a steady job for life, who financially supported his wife, who carried out her family responsibilities without any financial recognition for her contribution to society. After the second world war, women were sent back into the home from the workplace and the nurseries were all closed down.
	The model of work and family life on which the old pensions system was based is very long gone. Women's and men's working and family lives are increasingly complex, with fragmented working patterns, a complex system of caring for children, parents and other dependants, and trying to combine that with making financial provision. The world has changed since the days of Attlee and Beveridge. Now we seek to legislate for the model of the family, working lives and the care of dependants. That is why I say that basing the new system around women and what is right for them will make it right overall, because it will focus our minds on what is different today from what was done when Beveridge and Attlee set up the original system.
	We know the position in which the old system has left women. I do not have time to go through the entire range of statistics, but listing them one after another shows how women have been disadvantaged. For example, 2.2 million women do not accrue rights even to the basic state pension. Retired men on average have between £50 to £100 per week more private pension than women of the same age. Almost two thirds of divorced and separated older women have no private pension income at all, and by 2020 there will be as many divorced women aged 65 to 75 as widows.
	I have about 10 other statistics, but if I go through them all, there will be no time for anyone else to speak. It is a uniform picture of women being disadvantaged and of inequality in the system, which does not reflect the reality of modern life. Again, if we get it right for the modern system of the family, working life and women, we should get it right overall.
	The Bill starts to do that, with the reduction in the qualifying years to build up a full pension entitlement and the reduction in the number of qualifying hours, and by positively crediting the time spent caring, so that for the first time we properly treat social contribution on an equal footing with cash contributions. Under the previous system, the cash contributions were credited but the social contributions were not, because it was not necessary. The woman would be looked after by the man. That is the way it worked.
	Personal accounts will give everyone the chance to save in a low cost environment, and restoring the link to earnings and embedding it in legislation will make it far more difficult than it was last time for a future Mrs. Thatcher to break the link again. We have the figures showing how those changes will bring far more women and far more carers into entitlement to pensions, and make it possible for those women to accumulate a decent pension in future.
	Instead of 30 per cent. being entitled to a full basic state pension, the Secretary of State explained that 75 per cent. of women will be entitled to that by 2010 and over 90 per cent. by 2025. The Bill is excellent and provides a good basis for adjusting to modern times and a modern world, not just for the next 40 years but hopefully beyond that, although I would not like to predict how the world will have changed over that period, given the present speed of change.
	As my hon. Friend the Member for Colne Valley (Kali Mountford) acknowledged, the set of proposals in the Bill has been carefully crafted and costed, but like other colleagues, I shall suggest some areas where I ask Ministers to look again to see whether we can stretch it a little further. I know that there was some dismissal of the way in which the tax relief disproportionately benefits the better off, but perhaps it is possible to do a little more stretching within that equation to deal with some of the issues that have been raised.
	Before I move on to that, I shall deal with a topic that has not been mentioned. Unless we sort out the gender pay gap, we will never achieve equality in retirement. Women who work full time earn 13 per cent. less in median hourly earnings and 17 per cent. less based on mean hourly earnings than men. Women are at greater risk of falling below the poverty line. If people are in poverty while they are in work, they take that poverty with them into retirement. That is why the statutory minimum wage was so important. It made a crack in that gap, but the gap is still there.
	It is important to place the debate in the context of the Women and Work Commission report. The commission was given the task of seeking to close the pay and opportunities gap for women within a generation. That ties in closely with the changes to the pension system. The Trade and Industry Committee, of which I am a member, is studying the Women and Work Commission report and how and if it is to be implemented.
	I do not have time to discuss the excellent research findings in the report produced by the Equal Opportunities Commission with Scottish Widows, which looked at the psychology of choices made by men and women, which is clearly influenced by the financial resources that they have. It examines the proportions of men and women who say that they are able to save more money, and how much money they feel able to put into provision for their retirement. Women tend to use any money that they have to give to their children and to look after them, rather than making personal provision for their own retirement. That research is interesting.
	On the Bill and points that were raised by colleagues and others earlier, four out of five part-time workers are women. In spite of the provisions in the Bill, many will still find it difficult to build up their entitlement to a basic state pension. I, like others, can cite people who work, for example, as a dinner lady at lunchtime and in a corner shop in the evening, but who do not manage to get above the lower earnings limit, pay their national insurance contributions and gain eligibility in any of the jobs that they are doing. Will the Minister look into the possibility of amalgamating the hours and the work that they do, so that those people can be given a credit?
	It was pointed out to me by my hon. Friend the Member for Colne Valley after she had spoken that women who do not build up eligibility for credit and for pension will have to be paid something anyway. At the end of the day they will be given a credit of some kind, such as a minimum pension guarantee, so why not find a way to credit the work that they are doing and to amalgamate their various jobs? If they are doing a number of part-time jobs, none of which gets them into a position where they are paying NI contributions and therefore building up their entitlement, we should find a way for them to do that. I ask the Minister to consider that point, with which the Secretary of State expressed some sympathy.
	Carers UK applauds the introduction of the new carers credit and has highlighted the tens of thousands of extra carers who will become eligible because of the changes that are being made. However, the qualifying conditions mean that 40,000 people caring for 20-plus hours a week will still not get entitlement to basic state pension and that 60,000 people will still not get entitlement to the state second pension. My hon. Friend the Member for Northampton, North (Ms Keeble) gave some good examples of the sorts of people who are not covered and why that is. The Carers UK document sets out six categories of people who would clearly seem to be caring for people but will not be able to build up the qualifications they need to become eligible for getting the credits that would feed into their pensions. For example, there is the person who cares for someone but does not wish to claim disability benefits. There is the person who is looking after someone with fluctuating conditions, so they claim their benefit or credit one week, and then the next week they have to go back and say that the situation has changed. There is the person caring for someone who goes into hospital for long enough to lose their benefit. The Carers UK document sets out a whole range of situations in which people who are caring for others for more than 20 hours are week are unable to get the entitlement that enables them ultimately to get their pensions.
	In relation to the big debate that took place earlier about who might be able to certify that someone is a carer for 20 hours a week, Carers UK proposes that that could be done by a health or social care professional—a GP, a social worker or a health visitor. A GP may well know that a person with whom they are dealing has someone who is caring for them for that length of time, even if they are unable to say whether they need it. I ask Ministers to look again at that proposal, or at least to allow eligibility to rest not only with those with high-level disability or incapacity benefit.
	The EOC research found that if conditions were right, including the option of working flexibly, up to 1 million older workers said that they would re-enter the work force. The Minister might like to consider extending the right to request flexible working to all, which might partly sweeten the pill of raising the retirement age. It could be a slightly less daunting prospect if we say to people, "You might carry on working for longer, but this flexibility means that you do not necessarily have to work bang up to that retirement age."
	I congratulate the Government on carrying out a gender impact assessment. From April this year, all Government Departments will have to undertake that in relation to significant pieces of legislation under the new gender duty on public bodies. Perhaps the Minister could point out to his colleagues in other Departments that they will have that task in future. I look forward to some extremely interesting reports.
	My hon. Friend the Member for Northampton, North talked about the importance of information and publicity and had an interesting debate with my hon. Friend the Member for Aberdeen, South (Miss Begg) showing that whether or not the Government put out the right information it is crucial to think carefully about how to explain systems that remain complicated no matter how much we try to simplify them.
	We seem to be moving towards a consensus. I am pleased that that consensus reflects more accurately the world as it is now and moves us on from the world of 50 years ago. I hope that we can get this right in a way that is fair to women, to part-time workers, to their dependants, to carers and to men. If we move along those lines, we should end up with a pensions system for the future that is fair and reflects life as it is lived now, in all its complexity and with all its difficulties, and gives people a decent deal in retirement instead of leaving them in an appallingly unjust situation. I commend the Bill and hope that we will consider amendments to improve it further as it makes its way through the House.

Philip Dunne: Like many Members, I welcome the Bill. I am pleased to follow the hon. Member for Amber Valley (Judy Mallaber). Somewhat to my surprise, I found myself in agreement with many of her comments about the benefits of the Bill in bringing women, carers and others who have not been able to secure full state pensions into that category.
	It has been an interesting debate enlivened at one point by the revelation that my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) has his own shadow in the copycat form of the hon. Member for Yeovil (Mr. Laws). We are getting used to the Government looking to the Conservative party for inspiration for fresh policy initiatives—for example, in this Bill we have the linking of the state pension to earnings rather than prices, which was in the Conservative manifesto at the last election—but now we learn that the Liberal Democrats look to the Conservative party for their parliamentary questions.
	The Bill seeks to deal with a big demographic challenge that has been ticking away but has not been addressed by any Government for some time. An illustration of the consequences of that was brought home to me in my constituency the other day by the primary care trust, which had put together a report on our community hospitals that pointed out that more than 30 per cent. of the people in south-west Shropshire are now over 65. I accept that that proportion is much higher than the national average, but that is still rising rapidly. Those over 85 are expected to increase by 50 per cent. over the 10 years to 2013. As a result of medical advances and people living longer our future pension provision faces a rapidly growing funding crisis. The Bill is a first step in attempting to deal with that.
	Sadly, the Bill will do virtually nothing for many years for existing pensioners. Reservations have been expressed to me, and no doubt to other Members, by representatives of pensioner groups about the fact that it is such a forward-looking measure that does so little for existing pensioners. The link to earnings, which the Chancellor has left himself wriggle room to defer until 2015, means that for today's pensioners a very modest increase in their state pension might be forthcoming in anything from five to eight years' time. That does not give rise to much enthusiasm in the senior citizen forums that I attend.
	I welcome the introduction of personal accounts and the prospect of restoring some of the savings culture that has been so weakened, particularly in the past 10 years. When I have raised that with Ministers in the past, they have always tried to brush it aside by saying that it is entirely correlated with the strength of the economy, but it is not purely to do with the economy but with the culture and savings habits of the population.
	Let me deal with two main difficulties with the Bill. One is an omission and I hope that the other can be tackled in Committee. The omission is the lack of reform of public sector pensions. That is a missed opportunity. For party political reasons, the Government have not dealt with the disparity between public and private sector pension provision and established common rules for all pensioners in this country. When the Secretary of State was challenged about that in the Select Committee, he said that he did not perceive it as a problem because 10 per cent. of civil servants change employment every year. He anticipated that that would continue so that, by 2026, only a minority of people in the civil service could retire at 60. He calculated that, by the time the measures were fully implemented, only 3 per cent. of civil servants would be entitled to retire at 60. That may be the case because the arrangements will be introduced over several decades. In 50 years, no one in the civil service will retire at 60. However, that is far too long a period for bringing the two sectors of society together. The Government have made a feeble attempt to find an excuse for not being prepared to tackle the public sector pension challenge.
	My hon. Friend the Member for Runnymede and Weybridge referred to the other issue when he mentioned the state second pension. The abolition of the contracted-out rebate and the proposals to move the state second pension on to a flat rate over time have revealed the prospect of many people who are currently in that pension regime saving for no return. The state second pension will effectively be a stealth tax dressed up as equalisation of pensions. That must be tackled, because there is an injustice in arrangements whereby the benefits of a specific category of people go to waste. I hope that we can consider that in Committee and ascertain whether we can introduce provisions to right the wrong.
	I want to concentrate on two other specific matters. The first is specific or general advice, which relates to the operation of personal accounts. It has been a thorny issue for the Government, not least because of their track record. Other hon. Members have mentioned the parliamentary ombudsman's devastating critique of pensions mis-selling, which the Government ignored but the public did not. It raises the question of trust. If the Government wish to encourage saving, the population needs to have complete trust and confidence that the governance and structures of the scheme in which it saves are subject to rules of conduct. Advice is key. As other hon. Members said, given the prevalence of means-testing, which will continue to apply to many who consider whether to opt in or out of the personal accounts scheme, it is important that people receive clear guidance about whether it is appropriate and in their interests to participate. The Government have failed to tackle the matter fully, although I expect that it will be picked up when we consider the second stage Bill in the summer.
	Trust covers so many different aspects. The collapse of final salary pension schemes has posed questions, with which we are all now familiar, about pensions. The Financial Services Authority imposes clear rules and procedures on private sector providers in the savings industry. The Government choose to ignore that when they describe the way in which the personal accounts system might work. That is a great mistake. When setting up a new system, it is vital for the Government to use clear, precise and careful language, especially when they describe what they want to achieve and try to build trust among the population.

Philip Dunne: We will participate in that consultation and examine the Minister's pronouncements carefully, whether they are formal or informal. A problem with advice is that it adds cost. The Minister accepts that some sort of advice will be necessary, whether in a generic printed form or on websites. However, it needs to be clear, available and inexpensive.
	The second matter, which follows from the first, is trust in the system of governance. I asked the Secretary of State about independence during his opening remarks and I did not find his response reassuring. Independence and the perception of the independence of the regulatory body is vital because it helps establish trust in personal accounts. For individuals, many of whom will not have saved previously, to decide to lock up amounts of money for the whole of their working lives, they need to be sure that their savings will be administered properly, invested wisely and not be subject to Government interference.
	In the consultation stages before the Bill was published, many commentators called for the scheme to be independent of Government and accountable to Parliament, similar to the board of trustees of a defined contribution scheme. The Pensions Commission proposed that and the Select Committee agreed, as did many of the independent commentators, from the Consumers Association—Which?—at one extreme to the Investment Management Association acting for the professional investment managers at the other.
	Although the Secretary of State talked about independence, the Bill gives him specific powers. I should like to reiterate them, to ascertain whether the House believes that the personal accounts delivery authority will be independent. The Bill gives the Secretary of State powers to determine the average earnings calculation—surely that should be job of the newly independent National Statistics? He will have the power to remove the chairman or any non-executive. He will also have the power to determine the remuneration of the chairman, the chief executive and all the non-executives, covering their pay, their pensions, their allowances and their gratuities—it is interesting that the members of such an authority might expect gratuities—and to determine whether they are entitled to compensation on loss of office. He will also have the specific power, set out explicitly in the Bill, to issue guidance from time to time to the authority about the discharge of its functions. The authority will have to pay regard to that guidance.
	The authority will be independent in name only, not in substance. The Government need to be much more imaginative in granting independence to the authority and, more specifically, to its successor, the personal accounts board. Perhaps they might like to look to the Conservatives for ideas on how to grant independence, so that the public can have real confidence, over successive Governments, that their funds will not be at risk from Government meddling.

Ann McKechin: The overriding message from today's debate has been that neither the issue of pensions nor the Bill can be seen in isolation. The Government need to adapt to people's increasingly complex work and social lives, and to develop a new approach to preparing our citizens for making financial decisions appropriate to their needs. My hon. Friend the Member for Amber Valley (Judy Mallaber) has mentioned the need for a continuing effort to address the pay gap between the genders. Other hon. Members have mentioned the issue of those who suffer from long-term low pay, and their ability to make their savings work for them.
	I congratulate the Department for Work and Pensions on the way in which it has carried out the pre-consultation process, including the work of Lord Turner's commission. This is a good example of the Government doing the necessary ground work for an ambitious programme that will affect people's lives for the next 30 to 40 years. Building a robust and thorough consensus is very much part of that. Despite the very long speech by the hon. Member for Yeovil (Mr. Laws) on behalf of the Liberal Democrats, I am still somewhat confused as to what his proposals are. He seemed to suggest that he would be part of the consensus this evening, however. The Scottish National party has indicated its agreement in principle to a personal account system, and I shall be interested to hear how it envisages such a system operating under its own policies. No doubt its representatives will table amendments on Report, and it will be interesting to flesh out the debate at that stage.
	On the major points, the Government have achieved the consensus correctly, although there obviously had to be an element of compromise involved. The commitment to restore the earnings link is essential and, like many other Members, I would urge the Government to make that reconnection sooner rather than later. We need to ensure, as far as possible, that the real value of the basic state pension is at least preserved, and to encourage people to come on to the personal accounts system.
	In my opinion, the most important feature of these proposals is the automatic opt-in provision. Most people are aware that it makes sense to save for their retirement, but as I found out when I worked as a solicitor before coming into the House, persuading them to do so is like trying to get them to draw up a will. They know that it is the right thing to do, but many people, especially the young, have an inbuilt resistance to giving the issue serious thought leading to a definite decision. Death and retirement planning remain the modern social taboos.
	There is no doubt that this is a complex issue, however, and many people lack the knowledge to make an informed decision, or even to know where to go for proper advice. Poor awareness often translates into unrealistic expectations, particularly for those on the lowest incomes. I welcome the comments made on Monday by the Minister for Pensions Reform and the Economic Secretary to the Treasury about the need to improve people's understanding of their financial affairs in general. This must involve tackling the great deal of misinformation that exists and which, unfortunately, in many cases targets the most vulnerable and least knowledgeable in our society. This measure must also be part of a wider effort to persuade more people of the value of saving regularly to deal with emergencies when they arise and to control their personal debt and keep it at a sustainable level. Otherwise, we shall face the possibility of people deliberately opting out of the scheme for short-term emergency reasons and losing out in both the short term and the long term.
	A number of hon. Members have rightly mentioned the fact that we need to restore confidence in pensions. Again, this is particularly true for those on the lowest incomes. Although the financial services industry has been perfectly capable of dealing with people on higher incomes, it has never truly been able to offer stand-alone pension products for those on the lowest incomes. The level of administrative charges remains one of the most crucial factors in determining the worth of the scheme. That is why the reduction of the administrative charge for the proposed personal accounts to a much lower level than those charged on the open market will be significant for those on the lowest incomes. Given that at least one third of the adult population are not saving for their retirement at all, the need for such change is urgent.
	It is also true that the nature of work, our health as a nation and social changes such as the fact that 25 per cent. of us now live alone, make it difficult to imagine what is going to happen 30 to 40 years hence. The circumstances when our parent's generation entered the workplace had changed radically by the time they retired. My mother, who is 79 years of age, received a dowry from the civil service when she left to get married in lieu of her benefits; in fact, she has received no pension for her years' service. When she returned to the workplace, she was not allowed, for the first few years, to join the local authority superannuation scheme.
	Thankfully, those circumstances are now gone and past. The current adult population, however, are seeing rapid changes and much more variety in how people work, how long they expect to work and the type of jobs that they enter. Those who are entering the job market now will see even more change. We cannot just park the issue for 20 years at a time; we must be prepared constantly to review and alter arrangements to suit changing lifestyles.
	We have spoken about the raising of the pension age. Given that I represent a city that is routinely quoted as having the lowest life expectancy rates in the UK, the Minister for Pensions Reform will not be surprised that while I understand the Government's motivation, I am also concerned that that must be met by a visible, firm commitment to address the health inequalities that bedevil cities such as Glasgow, and by an equally firm undertaking to keep the matter under review. Obviously, it is possible—I hope that it is less rather than more likely—that life expectancy rates will stall or decrease as new health problems emerge. Again, we must build flexibility into the system and keep it under regular review.
	Clearly, addressing the gender gap, reducing the number of years of qualification and reducing the number of hours for carers are important for our female population. We must be mindful, however, that affordability is much more likely to be a constraint for women than for men, with only 37 per cent. of women working full-time, compared with 60 per cent. of men. Women need to know that the new scheme will work for them and adapt to their life changes. As some of the problems experienced in relation to the tax credit scheme showed, we all underestimated to an extent the complexity of people's working patterns. We need to address that.
	The thoroughness of the gender assessment carried out was welcome and helpful. However, as my hon. Friend the Member for Aberdeen, South (Miss Begg) mentioned, we must ensure that the issue of trivial lump sum commutation is dealt with effectively. People will therefore be able to save with confidence, and even if their savings are low, which is likely for those who are over 45 when the scheme starts in 2012, they will get some value from them, even if only in the form of a lump sum. It is not, as the hon. Member for Yeovil said, that the scheme itself is at fault. Women's median average earnings are much lower than men's, which we should continue to address—the minimum wage has improved the position—but we should also remember that women currently live longer, so their annuity values will be lower. We must therefore ensure that they manage to escape the means-testing trap.
	I agree with many of my hon. Friends that we need to consider the issue of carers. With 120,000 carers caring for 20 hours-plus a week who will apparently miss out under the current regulations, we must test the issue against the effect on carers and ensure that they are relieved of a burden. Yes, as the Secretary of State mentioned, there are additional costs, but we are still providing 50 per cent. of tax relief to the highest earners in society, the great majority of whom are male. If the Government are to follow through the gender assessment impact process as thoroughly as I am sure that they want to do, they should consider whether continuing that form of benefit is justifiable given the proven needs at the other end of the spectrum, where most of those affected are female. Will the Department keep that in mind in ongoing negotiations with the Treasury?
	This is a good Bill that will deliver substantial benefits, particularly for women and carers, who are currently not covered properly by the pensions market. It is a major step towards encouraging confidence in long-term savings. However, it must be met with a firm commitment to tackling the other problems that I have mentioned, which have an impact on both pensions and income more generally.

Lorely Burt: I am grateful for the opportunity to speak because I have a special interest in the Bill. Although, as I am sure my speech will make clear, I am no expert on pensions, I am passionate about the subject. I speak for the Liberal Democrats on women's and equality issues, and I can think of no area in which this country has treated its women more shamefully.
	One in four women pensioners in Britain today lives in poverty. The average income of women pensioners is only 57 per cent. of that of male pensioners, and only 30 per cent. of women retiring today qualify for the basic state pension. A good many statistics have been quoted, so I shall simply say that more than 2 million women are poor enough to receive the means-tested pension credit. That will raise their weekly income to £114.05, which is still £14 below the Government's official poverty level income of £128 for a single person. Of those 2 million women, 20 per cent. will be in even worse poverty because, for whatever reason, they do not claim the means-tested benefit.
	It is not difficult to see why this state of affairs has arisen. For the most part, it is a self-perpetuating problem that will not be susceptible to resolution in the foreseeable future. As the hon. Member for Amber Valley (Judy Mallaber) observed, women earn less than men, so they accrue fewer pension contributions. Even if we compare the average full-time wages of the sexes, women earn 17 per cent. less than men—but many women work part-time so that they can care for growing families, elderly relatives and others, and part-time hourly earnings for women are only 88 per cent. of men's. Given their lower earnings, women's ability to pay any money into their pensions is diminished.
	Historically, as many Members have pointed out today, the pensions system was designed on the assumption that the husband would be the main breadwinner. Married women were led to believe that they would still receive pensions if they paid the so-called married woman's stamp, instituted by Beveridge in 1948. Too many found out too late that that was a fallacy. Even today, there are women who are still paying the married woman's stamp. But perhaps the greater contributor to poverty among the elderly, particularly women, has been the fall in the value of the basic state pension caused by the removal of the earnings link in 1980, on Mrs. Thatcher's watch. The basic state pension constitutes about half the income of women pensioners, a far greater proportion than that of men. Its value has now shrunk to £52.50 a week less than it would have been if the earnings link had been maintained.
	For today's 7 million women pensioners the picture is bleak, and for the fifth richest country in the world it is a national scandal. What are we going to do about it? In the Bill, the Government have gone quite a long way towards implementing the Turner recommendations, although if they had embraced the recommendations for a citizen's pension—which has been Liberal Democrat policy for some time—much of the detail of the Bill, which leaves out some people who deserve a pension, would not have been necessary. However, we welcome the Bill as far as it goes, although I shall respectfully point out some areas in which I think it could be made better and fairer.
	As we have heard, the Bill will help by reducing the number of years contributions needed for someone to claim the basic state pension to 30, from the current 44 for men and 39 for women. That will help women because, as I have said, many will have taken time off to bring up children, care for elderly relatives and so on. The introduction of the 30-year rule will create a cliff edge for those who have failed to achieve the 30 years because they retired a day, a week, a month or a year or more too soon. The gap that they will face will be huge.

Lorely Burt: We will propose amendments to help those who fall short of the cliff edge to qualify. We will submit them in Committee, but let me say that the example given by the hon. Member for Colne Valley about people with part-time jobs will be taken into account.

Lynne Jones: I want to endorse the comments that several colleagues made about the welcome improvements in state pension provision for women in this legislation. It is also good that there has been such consensus on measures in the Bill, particularly those on the restoration of the link to earnings. However, I have some concerns about the lengthy delay before that improvement will be brought about. We will still see the value of the state pension reduce and means-testing increase until 2012 or even 2015. As has been pointed out, that means that today's basic pension will be eroded in value from about £85 to £70, and potentially even to £67, a week. That is not good enough for a Labour Government.
	The Pensions Commission pointed out in its earlier reports that, based on the Government's own figures, spending on pensions and pensioner benefits was set to increase by 2050 to about 7.6 per cent. of gross domestic product from the current figure of 6.2 per cent., after an initial fall between 2010 and 2020 as the state retirement age for women increases. The commission proposed a trade-off between improved benefits and a rise in the state retirement age. For example, its proposed restoration of the link from 2010-11 at the latest could be accommodated if the state retirement age were increased to 69 by 2050 and spending increased to 7.5 per cent. of GDP, which is slightly less than the Chancellor's prediction if there is no change. The Turner report reckoned that if the state retirement age were increased to only 67 by 2050, spending would increase to about 8 per cent. of GDP.
	The Government have accepted that we should try to reduce means-testing by the restoration of the link to earnings, but they say that doing so to an earlier time scale cannot be afforded. Yet according to their figures, we are talking about a cost of some £3 billion, at today's prices, by 2050. Adopting the 2010-11 proposal would mean an increase to £50 billion, compared with £47 billion, if adopted, in 2012 and £42 billion, if introduced, in 2015. Those are fairly small sums in terms of the growth in GDP that we might expect by 2050. None the less, there is a small, affordable gap and, as I said in an earlier intervention, it could be bridged simply by switching priorities. I do not agree with the proposal of the hon. Member for Yeovil (Mr. Laws) that savings should be made from public sector pensions. That is far too vague and probably not deliverable, and I do not particularly wish to advocate a reduction in the benefits of people working in the public sector, who generally receive lower remuneration than those in the private sector.

Lynne Jones: Well, I will not actually be standing at the next election, but I will be campaigning, and I hope to do so on as good a pensions package as possible. I do not anticipate that the change will be delayed until 2015—it is just that the Government have not specified whether it will be 2012 or 2015. I certainly hope that it will be well before 2015.
	Where could we obtain the additional resources to improve the pensions package proposed in the Bill? The Turner commission pointed out that we spend large sums of money on tax relief, which it described as costly and poorly focused. It did not advocate one rate of tax relief for pension contributions for various practical reasons, and my right hon. Friend the Secretary of State was right to point that out. However, at one of the all-party group meetings with Lord Turner, I had the opportunity to make my point about the large sums of taxpayers' money that go to some of the richest people in the land. Apparently—and the figures come from my right hon. Friend the Member for Birkenhead (Mr. Field)—5 per cent. of the population get half of the tax foregone through tax relief on pensions. Lord Turner suggested a way forward that I commend to the Government. He suggested that the total pensions pot that is eligible for tax relief—now some £1.25 million—should be frozen. I noticed in the last pre-Budget report that my right hon. Friend the Chancellor projects an increase in that sum to £1.35 million—that is what I recall the figure to be, although I stand to be corrected. We have the opportunity, therefore, to shift our priorities from tax relief for those in the very highest income brackets—who are not necessarily the highest income earners—and use the money released to benefit the majority who are on fairly low incomes and depend on state provision.
	Ros Altmann makes a similar point, but she also points out that if the contracting-out provisions were abolished, £10 billion could be released annually. As I have said, the proposals would involve an increase of £3 billion annually by 2050. Another submission to the Work and Pensions Committee suggested that we could consider reducing or abolishing the tax relief on lump sum payouts by private pension provision. If the Government really wanted to prioritise improvement in state pension provision, they could do so.
	I endorse the comments by the hon. Member for Solihull (Lorely Burt) about the money that we will waste on a computer system for identity cards, which would be better spent on this issue. I could add to that the cost of replacing our nuclear submarines, but I shall stick to the possibilities for redirecting funding from within the pension system itself. If we do not improve the basic state pension and remove means testing more than the Bill proposes, all we will do is ensure that we do not have any more means testing by 2050 than we have at present. We all know the present disincentives to private saving, so I urge my right hon. Friend the Secretary of State to try one more time to bend the Chancellor's ear on this issue. If we do not make the improvements that I have outlined, we will not build a truly firm foundation for private pension saving. In addition, people being auto-enrolled into the national pensions scheme could discover, when they come to retire, that continual means testing means they are still no better off.

Michael Weir: We have heard a lot in this debate about the consensus that exists in this House in respect of various pensions proposals. I suspect that members of the Scottish National party and Plaid Cymru stand somewhat outside that consensus. We support some aspects of the Bill, but other proposals cause us considerable concern.
	The hon. Member for Amber Valley (Judy Mallaber) is no longer present, but she said that the plight of women pensioners resonates with her older constituents. That may be true, but the Bill's biggest failing is that it does not tackle the problems faced by existing pensioners. The hon. Member for Aberdeen, South (Miss Begg) argued that it is not meant to, and I accept that that is probably the case, but we will fail to achieve the consensus that the Government claim to be seeking if we do not deal with those problems.
	The important consensus is the one that exists outside this House, among the general public. If we do not achieve consensus there, we will not get people to take up the personal account—an important element in the modernisation of the pensions system. If today's pensioners do not feel that their concerns are being addressed, they will continue to feel aggrieved, and they will pass that feeling of grievance on to others.
	When the National Pensioners Convention launched its alternative White Paper, it stated:
	"The Government's failure to address issues of pensioner poverty, unpopular means testing and the plight of 5 million existing women pensioners is the biggest whitewash of older people in the history of social policy".
	It does not get much more aggrieved than that, but that is a feeling shared by many of today's pensioners.
	All hon. Members probably agree that there should be a link between earnings and pensions, and there was some discussion earlier about exactly what that link should be. That is important, as it was announced today that general inflation had reached 3 per cent., the highest level in 10 years. However, the inflation faced by poorer pensioners is effectively much higher, as more of their income goes on things such as energy—and gas prices, for example, have risen by 40 per cent. over the past year alone.
	The Government have accepted that there should be a link between pensions and earnings, but have delayed implementation until 2012 at the earliest. As has been noted, the link might not be introduced until 2015. Perhaps I am getting cynical in my old age, but I suspect that the date may well depend on when the Chancellor becomes Prime Minister and decides to go to the country. The introduction of the earnings link is perhaps a sweetie to be pulled out at the appropriate moment—although the matter is less relevant in Scotland, as we will be well on our way to independence by then.
	The National Association of Citizens Advice Bureaux has evangelised for poor English pensioners, and has asked for more details as to when the earnings link will be re-established. I do not suppose that the Minister will tell us, but it would be nice for pensioners to know when they might expect that uprating.
	However, even if the Government were to re-establish the link, it would do nothing to address the fact that today's pensioners have fallen way behind since the Tories cut the link in the first place, nearly a quarter of a century ago. Moreover, it is worth noting that what is being proposed is not the restoration of the link that has been talked about in this debate. Between 1975 and 1980, the Secretary of State with responsibility for pensions was required to have regard either to earnings or prices, depending on which of them he considered to be more advantageous to beneficiaries. That meant that there was some flexibility when it came to determining whether earnings or prices were of greater benefit in uprating pensions, whereas the new version will depend straightforwardly on earnings.
	In addition, although restoring the link with earnings will prevent the basic state pension from declining in value year on year, it will not make good the fall in the value of pensions that has happened over the years. That is an important point, which is not fully understood by many pensioners. I quote again from the alternative White Paper produced by the National Pensioners Convention. It is referring to the Government's White Paper, but the same point applies to the Bill. The document states:
	"The White Paper's failure to call for an immediate increase in the basic state pension and instead opt for a promise to restore the link with earnings some time between 2012 and 2015 will only give those on a full basic state pension approximately £1.40 a week more that year than they would receive anyway under the present system. Furthermore, the absence of any proposals to immediately improve existing state pensions has also in effect ignored the widely acknowledged scandal of low income amongst millions of existing women pensioners."
	Restoration of the link to the basic state pension will be delayed until at least 2012, when the value of the pension will have fallen to about 12 per cent. of average earnings—£71 in current terms. As has already been said, up to 3 million of today's pensioners will die before the link is restored. Worse still, if it is delayed until 2015, the value will be only 65 per cent., and it is estimated that up to 4.5 million of today's pensioners will never receive any benefit.
	Those are legitimate concerns among today's pensioners, and they affect the debate in the country, as well as attempts to find a consensus on the way forward. If we do not tackle those problems and provide a firm foundation for the future of the state pension, the Bill's proposals will not succeed.
	Much has been said about the citizen's pension. The Scottish National party and Plaid Cymru support the citizen's pension. After our last debate on pensions, I thought that we might be the last remaining parties to do so, but the Liberal Democrats seem to have come round to it again. The problem with the current system is that it is based on labour market participation, the effect of which is to translate poverty during people's working life into poverty in old age. We all know that many women and carers do not receive the full basic state pension, because they have a broken employment history. I support the provisions that will tackle that problem. We welcome them, but they will still leave too many people in poverty.
	Whenever the issue of pensioner poverty is raised, the Government point to the pension credit—as has been done this afternoon—but why should a pensioner have to rely on means-tested benefit for a decent retirement pension? The state should—indeed, it must—ensure that every one of our pensioners has a decent minimum income in retirement. By the very act of introducing pension credit, the Government accepted that the current rate of basic state pension is inadequate. Under a citizen's pension, every pensioner would have a decent state pension, which under our proposals would be set at the current level of basic state pension, together with the maximum pension credit, and thereafter linked to increases in average earnings.
	If we introduce such a citizen's pension, we will ensure that all our pensioners are lifted out of poverty and given a firm foundation on which they can build their own additional pension provision. I do not believe that the personal account scheme that the Secretary of State proposed has any real chance of success, because it will be undermined by means-testing, especially for its main target group—those on relatively low incomes. Whatever the reality, there is a great fear that they will not gain much at the end of the day, due to the effect of the means-tested pension credit. If, however, it was linked to a citizen's pension it could provide a powerful incentive to make private savings and ensure that each pensioner had a much better standard of living in retirement.
	The hon. Member for Glasgow, North (Ann McKechin) expressed surprise that we supported the personal account. I do not know why, because we proposed something similar more than two years ago, and when the White Paper was debated recently I made it clear that we supported such a scheme as an important part of the future pension.
	Of course, it is legitimate to ask how we propose to fund the citizen's pension, and we have not shied away from that. We do not follow the same route as the Liberal Democrats, as we have published figures to show that by using the amount currently spent on basic state pension and pension credit—and, crucially, by reforming the current system of tax relief on private pensions, which the hon. Member for Birmingham, Selly Oak (Lynne Jones) touched on—we could afford to create a true citizen's pension. The problem is not lack of money, but lack of political will.
	The Government often tell us that we must take the hard decisions. Frankly, it is about time that the Government took a hard decision for the benefit of the majority of pensioners. It is worth noting the extent of the tax relief on private pensions. When we published our proposals, "A Secure Retirement for All", early in 2005, we calculated that the amount of tax forgone with the subsidy amounted to £11.4 billion a year. In his report, Lord Turner points out that the cost is £12 billion, but he goes on to refer to a further £8 billion in national insurance contributions, taking the total cost of the relief to £20 billion. In effect, that is a massive subsidy to private pensions, which could be used to provide a decent state pension for all.
	Worse still—and I was surprised that the hon. Member for Glasgow, North also mentioned this—half the total cost of tax relief on private pensions is received by the richest 10 per cent. of the population. It is high time that tax relief was reformed to become much more progressive and transparent. In particular, it should be aimed at encouraging and rewarding low and moderate income earners to save for retirement. The Bill does not tackle that problem—that serious omission will undermine the whole idea of personal accounts. I note in passing that the TUC briefing also says that consideration needs to be given to reform of tax relief.
	Another aspect of the Bill with which we have great difficulty is the proposal to raise the state retirement age, which we believe will discriminate against those in many areas of the country where life expectancy is lower. The effect can be quite dramatic. If we take the example of a man in Glasgow—as already mentioned, one of the worst areas in this respect—I understand that life expectancy is about 69.3 years, whereas a man in Kensington in central London has a life expectancy of 80.8 years. Under the present system, Kensington man can expect to receive pension payments totalling £65,728—nearly four times that of the Glasgow man, who would receive a mere £17,888. If the pension age is raised to 68, Glasgow man would receive only £5,408, while Kensington man would receive 10 times more at £53,248. That is manifestly unfair.
	To be fair to Lord Turner, he recognised that problem and suggested that eligibility to pension credit should remain at age 65, but that has not been accepted in the Bill. I was slightly encouraged to hear the Secretary of State say that the Government were considering the matter further, which may result in some resolution of the problem. When the hon. Member for Bournemouth, West (Sir John Butterfill)—he is no longer in his place—was questioned about it, he said that it was all to do with health and particularly mentioned Scotland. Well, in Scotland, it is not all to do with health. It is to do with poverty, as the hon. Member for Aberdeen, South rightly said, and with poor housing. Nor is it just a problem in Scotland, as the same applies to many former industrial areas of England and Wales as well.
	It can be argued that inequalities in life expectancy may be eliminated over time, but although we talk about greater overall life expectancy nowadays, there is still a gap between different areas and until such time as that gap is closed, the problem will remain. As Age Concern mentioned in its briefing—Citizens Advice made a similar point—the impact will be disproportionately negative for people on low incomes, who may not have much choice about when they retire. The TUC drew attention to the same problem. It also said that there were many uncertainties about future mortality trends and that the Turner commission itself had identified some gaps in the data on the future of pensions. We therefore remain unconvinced that we should proceed with proposals to raise the state retirement age. Age Concern has also asked for assurances that increases in the pension age will be matched by measures to ensure that poorer groups do not lose out.
	There is an additional point. People may stay in the job market longer as a result of the changes and there are also the welfare reform proposals, which may bring many more people into the job market. The Government, in conjunction with the devolved Administrations, have to look seriously at how to create more jobs to mop up those groups. There is no point in getting people to work longer if the knock-on effect is on unemployment rather than pensions.
	To end on a note of some consensus, there are some areas of the Bill where we support what the Government propose.  [ Interruption. ] I am trying to be fair. We are generally supportive of the moves to create the national pensions saving scheme of personal accounts. However, I repeat that, in our view, that will work only in conjunction with a citizen's pension, to give confidence to those who are expected to use that scheme; otherwise, it will face the same problems as the current system. We also recognise that moves to increase the coverage of the basic state pension are sensible and have been widely welcomed in as much as they will offer some help to women and carers.
	We welcome the fact that the reduction to 30 years for the qualifying period, the carer's credit and the changes to the second state pension will help to boost the income of women and carers who have missed out on paying national insurance contributions because of their sometimes broken work records. However, we share the reservations voiced by Age Concern, which has called for the 30 year qualifying period and abolition of the 25 per cent. rule to be retrospective. The reality is that many older women, who are often among the poorest pensioners, will not benefit otherwise. Again, that move would go a long way towards addressing some of the concerns of today's pensioners. Only by doing that will we get a true consensus for moving forward.

Mark Pritchard: I am grateful to be called in this debate. I want to start with the comments made by the hon. Member for Angus (Mr. Weir) about a citizen's pension. Although his aim in trying to give an uplift to the standard of living for Scottish pensioners may be worthy, I wondered how that could be delivered in the context of an independent Scotland and where the revenues to pay for such pensions would come from, given that much of the revenue for Scotland at the moment comes from other parts of the United Kingdom. Although worthy in its aspirations and aims, that policy would be ruinous for the United Kingdom, for pensioners in Scotland and, more importantly, for already hard-pressed taxpayers in Scotland, suffering under a Lib-Lab Administration.
	I give a broad welcome to the Bill, although we have been waiting for some time for the Government to try to put right most of the wrongs that they have created—not least with the abolition of the dividend tax credit and the Chancellor's raid on pensions. My hon. Friend the Member for Ludlow (Mr. Dunne) rightly pointed to the key issue of trust. How can anybody trust the Chancellor again on pensions? Should he become Prime Minister, I will take that key message to my constituents. I think that it will be received with open ears, based on experience of the Chancellor's record. That raid on pensions stands at £5 billion and the figure is growing annually. That is a significant amount of money.
	Perhaps Members on the Government Front Bench will not really be interested in what I am saying, or believe it, so let me quote the right hon. Member for Birkenhead (Mr. Field), who is a well respected Member of the House and a renowned expert on pensions. He said:
	"when Labour came to power we had one of the strongest pension provisions in Europe and now probably we have some of the weakest".
	So, even Labour Members of Parliament have recognised that fact, and it is not just one Labour Member of Parliament. Others have expressed concerns in the House today. Indeed, the hon. Member for Birmingham, Selly Oak (Lynne Jones) has expressed grave concerns about certain elements of the Bill. I am sure that her criticism of the Government is not based on the fact that she is not re-standing under a Labour flag, but is genuine and sincere—there is no reason why I or her constituents should question that.
	Pension credit has been discussed in detail and I do not wish to repeat the points that hon. Members have made. However, I earlier raised the important question of Europe and the 2 million economic migrants who have come to the United Kingdom since Labour has been in office. We welcome those people, who, in the majority of cases, have made a great contribution to the economy and the social fabric of our nation. However, it must be said that their pensions might represent another ticking time bomb, even though there are arrangements in place with other members of the European Union about the transfer of pensions.
	I noted that the Secretary of State's response to my question on the matter indicated that people who had not accrued 30 years' contributions towards their basic state pension would nevertheless receive a pension credit on top of anything that they had paid in for that pension. Anyone who has worked hard, saved and paid contributions for 30 years will have a basic state pension that reflects their individual efforts, while those who, for reasons of portability, geography, or the timing of their entry into the United Kingdom—whether they be European nationals, or people who have decided to become UK nationals—have not made such contributions will receive a top-up from the British taxpayer. That is a worrying indicator for the future, and given that the scale of economic migration is unlikely to curtail over the next few years as the European Union is joined by new members, such as Croatia, Serbia and Turkey, it is likely that UK taxpayers will be picking up the bill even for the pensions of the foreign nationals who come and settle here. People in some parts of the country are fed up with picking up the bill for all sorts of things at the moment, so I would be interested to hear what the Minister has to say about that. I am not making some sort of xenophobic or scaremongering comment, but asking a reasonable and rational question in the national interest: is this affordable, given the scale of migration?
	Hon. Members on both sides of the House have come across the Motherwell Bridge pension fund, and I am aware that Ministers have made several comments vis-à-vis the financial assistance scheme and that fund. However, the FAS does not pay out 100 per cent. compensation. Many of my constituents are much aggrieved that, although they have worked hard and made provision for their retirement, the financial rug has been pulled out from beneath their feet. What protection will there be in the future for people who have made such provision, albeit through different financial vehicles?
	I suppose that savings are the starting point of the whole debate. I believe that Help the Aged has said that means-testing is pernicious, and the trouble with the Bill is that it does not go far enough to try to end means-testing. Means-testing is a clear disincentive to saving. Many hon. Members will have constituents who have made provision for their retirement, yet who see people who have not made such provision receiving equal benefits—or even sometimes better benefits—to those who have made the effort to save. Of course, not everyone has been in a financial position in which they have been able to make provision for their retirement, so clearly there are many exceptions. However, the principle of rewarding people who save is not taken forward far enough in the Bill. I hope that the Government will flesh out in a little more detail how they will incentivise people to save and reward those who make the effort to save.
	I have other points to make, but I want to be kind to my hon. Friend the Member for East Antrim (Sammy Wilson). I know that he will make relevant points about the Bill and about the emperor from Neath, the Secretary of State for Northern Ireland, who is again seeking to introduce measures through orders, rather than through the hopefully revived devolved Assembly of Northern Ireland. Lastly, I would like to mention the local government pension scheme. Many of my constituents think that the Government have been disingenuous in trying to open up so-called negotiations and "reasonable" dialogue on the local government pension scheme. There are several thousand dedicated and skilled local authority workers in my constituency, and they are right to expect transparency and honesty from the Government.

James Purnell: Tax cuts for older people—the increased age-related allowances.
	Let me make progress and answer as many points as possible because several important matters were raised. My hon. Friend the Member for Burton (Mrs. Dean) raised the important issue of her constituent who might miss out on extra pension contributions because child benefit had been paid to the father rather than the mother. My hon. Friend has campaigned on that issue resolutely, and I am delighted to be able to tell her that we will address that problem through the Bill. I think that her constituent will retire after 2010, so she will be able to benefit from the new regulations that will define those engaged in caring. Although that will usually mean that the credit goes to the person receiving child benefit, there will be flexibility to address the particular issue that my hon. Friend raised.
	The hon. Members for Runnymede and Weybridge (Mr. Hammond) and for Grantham and Stamford (Mr. Davies) raised the issue of the cliff edge. We need to remind ourselves of why we are introducing the Bill. We are doing so because at the moment only 30 per cent. of women receive a full state pension, compared with 85 per cent. of men. We want to put that right in the Bill. We could have followed the ordinary way of introducing policies such as these, which is to phase them in over time. If we had done that, however, we would have made progress too slowly—so we decided to bring in the policy in one stage in 2010, at which time 75 per cent. of women will benefit, compared with the 30 per cent. who benefit now.
	The hon. Member for Runnymede and Weybridge said that he wanted to bring in such a measure retrospectively for everyone and not have the cliff edge, but that would cost £1 billion, which is simply unaffordable. I am sure that he accepts that a line has to be drawn somewhere, and we have to say where that is to be. No one would benefit from his suggestion of phasing in the policy after 2010. The only difference that that would make is that women who would have benefited from our proposed changes would not do so. I understand why hon. Members have raised this issue, but a line has to be drawn somewhere, and 2010 seems to be the right time because before that women will be retiring at 60, whereas the women who will benefit from this measure will be retiring later.
	We will of course look in detail at the points raised by my hon. Friends the Members for Northampton, North (Ms Keeble) and for Colne Valley (Kali Mountford) about women who are doing two jobs that pay below the lower earnings limit. The problem should be addressed by the reduction in qualifying years to 30, however, and if we were to introduce a separate measure to deal with it, it would be complex for employers and could have consequences for the employment of those on low wages. We would therefore be reluctant to do that.
	My hon. Friend the Member for Aberdeen, South (Miss Begg) raised the issue of grandparents and we will be happy to look into the matter. It is worth saying, however, that it is possible to designate a grandparent as the recipient of child benefit if both parents are working. My hon. Friend might want to consider whether that is an adequate solution to the problem that she raised.
	Many Members, including my hon. Friends the Members for Northampton, North, for Aberdeen, South and for Amber Valley (Judy Mallaber), and the hon. Member for Hemel Hempstead (Mike Penning), mentioned carers. We will examine in detail in Committee the solution that has been put forward today—to include the provision as part of the local authority assessment period—to determine whether that would be an appropriate way of responding. Those are the points that were raised about women and carers and I hope that I have been able to address the concerns that some Members have expressed while welcoming the broad thrust of our proposals.
	Another key part of the debate related to the uprating of the basic state pension, which was raised by the hon. Members for Runnymede and Weybridge and for Yeovil. It is worth remembering that the last time we debated this issue, Opposition Members said that this measure was never going to be introduced. Fortunately, the Bill spikes that particular accusation by guaranteeing in legislation that the link will be restored in the next Parliament. Our policy on this is clear. Our objective is to restore the link in 2012, subject to affordability. However, the hon. Member for Runnymede and Weybridge could not even guarantee that. He could not guarantee that he could support his public spending plans. He could not even answer the point that my hon. Friend the Member for Burnley (Kitty Ussher) raised, to which I shall return later. However, he has less of a problem than the hon. Member for Yeovil.
	I was adding to my Laws index during the debate, and I shall now tot up the small spending commitments that the hon. Member for Yeovil has made. He is going to try to deal with the cliff edge, and with the issue of people having two jobs that pay below the lower earnings limit. He said that he would deal with frozen pensions—that is another £400 million—and that he would spend 0.5 per cent. of gross domestic product on his citizen's pension. He also said that he would spend another £1.5 billion on restoring the earnings link immediately. I know that he has a money tree, but his proposals represent a friendly-fire attack on his own shadow Chancellor, who must feel dread every time the hon. Member for Yeovil opens his mouth. Of course, when in Government affordability is the limit of the possible. We have made clear how the proposals are affordable. They are affordable because of the tough decisions taken in the Bill on the state pension age. We are grateful for his and the Conservative party's support on that issue.
	Hon. Members, including the hon. Member for Angus (Mr. Weir) and my hon. Friends the Members for Aberdeen, South and for Glasgow, North (Ann McKechin), raised the issue of the effect on poorer socio-economic groups. I understand those concerns. As the hon. Member for Angus said, that issue affects English industrial towns as much as it does other towns. For instance, people in my constituency die earlier than those in richer parts of the country. The right solution, however, is to address the causes: poverty, health inequality and occupational health. We must ensure that there is support for people who cannot work when they are closer to retirement. The wrong answer would be to duck that choice and pursue a policy that we cannot promise to deliver, because we cannot know how it will be affordable over time.
	The third issue that I want to address was raised by many Opposition Members—means-testing. It is an important issue, and the Bill more than halves the proportion of people who would have been subject to mean-testing. It is worth taking a step back and reminding ourselves what means-testing means in this context, namely, giving more money to poor people, disabled people and carers. The hon. Member for Yeovil talks about reducing the number of people who are means-tested, but 80 per cent. of those people who will get pension credit under our proposals in 2050 will receive more than the £115 under guarantee credit. Does he want to tell us how he will end means-testing? We would be interested to listen, as he clearly failed to answer that point in this debate.
	The hon. Member for Yeovil's policy on means-testing fell apart during the debate. At one point, he said that his citizen's pension would be based on people paying tax. Then he said that it would be based on the number of years for which people had been resident in the country. If so, he will have to have some kind of means-tested support for people who have not been resident for more than a certain number of years. He refused to say whether he would take benefits off people getting more than £115 under our proposals. Half of those people are getting more than £115 because they are disabled or are caring for someone with real care needs. Is he seriously proposing taking money off someone on £170 a week who is caring for a sick husband or wife, so that he can say that he is reducing means-testing? I will give way to him if he will confirm that.

Excise

That the draft Excepted Vehicles (Amendment of Schedule 1 to the Hydrocarbon Oils Duties Act 1979) Order 2006, which was laid before this House on 6th December, be approved. —[Mr. Heppell.]
	 Question agreed to.
	 Motion made, and Question put forthwith, pursuant to Order [9 January] and Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

That an Humble Address be presented to Her Majesty, praying that Her Majesty will, with effect in each case from 19th January 2007, reappoint James Samuel Younger to be the chairman of the Electoral Commission for the period ending on 31st December 2008, and further reappoint Pamela Joan Gordon to be an Electoral Commissioner for the period ending on 30th June 2007. —[Mr. Heppell.]
	 Question agreed to.
	 Ordered,
	That the Merchant Shipping (Inland Waterway and Limited Coastal Operations) (Boatmasters' Qualifications and Hours of Work) Regulations 2006 (S.I., 2006, No. 3223), dated 7th December, be referred to a Delegated Legislation Committee.— [ Mr. Heppell. ]

David Burrowes: It is a pleasure to have secured, for the first time, a debate on clostridium difficile. The subject is important, and merits not merely a short Adjournment debate but a longer debate, perhaps in Government time. Clostridium difficile infection is recognised by the Health Protection Agency as the most important cause of hospital-acquired diarrhoea. The purpose of this debate is to challenge the Government on whether C. difficile—as I shall refer to it from now on—is given the importance that it deserves in action as well as words.
	The debate is timely, given that last week a Department of Health memorandum warned that C. difficile was now
	"endemic throughout the health service, with virtually all trusts reporting cases".
	The official statistics paint only a partial picture. In 2005 there were of 51,690 reports of C. difficile among people aged 65 and over; in 2004 an estimated 1,300 deaths were attributed to it. There are clearly at least seven times more cases of C. difficile than of MRSA—methicillin-resistant Staphylococcus aureus—and at least four times more deaths from C. difficile than from MRSA. But is C. difficile receiving the attention that it deserves? Many would describe it as the Cinderella of hospital-acquired infections, but it deserves to be at the centre of everyone's attention, given its prevalence and the risks of fatality.
	The purpose of the debate is also to highlight the tireless efforts of my constituent Graziella Kontkowski, who, with her brother Mark—both are here in the House tonight—set up a website and forum, www.cdiff-support.co.uk. There are literally thousands of hits per day from the many people who wish to receive support and advice, and to give their stories. That highlights the profound concern about C. difficile throughout the country.
	My constituent was motivated by her and her family's experience with her grandmother, who sadly and tragically died on 26 September 2005 as a result of contracting C. difficile at North Middlesex hospital. Graziella tells me that half the ward became infected with the deadly bacteria, all due to lack of hygiene. Measures were not taken to prevent the spread of the bug, and patients and their relatives were not given information about the severity of C. difficile. Graziella's efforts to get to the truth and to secure improvements at North Middlesex university hospital and the other local hospital, Chase Farm, spurred her to set up the website and to help others in a similar situation to that of her family.
	C. difficile is an appalling infection, attacking particularly the elderly on prescribed antibiotics. The symptoms of severe diarrhoea, stomach cramps and fever, often followed by dehydration, take their toll on the vulnerable. Loss of pride and self-esteem is great, and extremely sad for relatives as they watch the deterioration happen before their eyes. That is particularly aggravated by the lack of information about what is happening. That is why the C. difficile support group was set up, and that is also why the Government must take urgent action.
	Many sad cases could be recounted, such as those of elderly patients who have fought successfully for years against cancer only suddenly to be struck down by C. difficile, and to die in a matter of weeks. Such tragic circumstances were highlighted in the outbreaks of C. difficile at Stoke Mandeville hospital that ended in 2005 and that led to at least 33 deaths. A Healthcare Commission report challenged the Government approach, not just to isolated incidents of infection control, but to the whole policy on health care.
	The report stated:
	"The achievement of the Government's targets was seen as more important than the management of the clinical risk inherent in the outbreaks of C. difficile."
	Have the lessons from that report been learned? Let me give another quote that highlights the lessons that need to be learned nationwide by all trusts:
	"operational problems arose out of the need to juggle a number of 'must do' objectives, including the control of finance, the reconfiguration of services, and meeting targets for waiting times."
	The juggling of those targets and reconfigurations is a reality across the country. In the Enfield area, Chase Farm hospital is facing the prospect of cuts to its accident and emergency services and doctor-led maternity services, and North Middlesex university hospital is debt-ridden. The risk is that as they juggle their priorities, they will drop the ball of infection control, particularly in respect of the care of the most vulnerable—the elderly. That is the Government's responsibility. As Graziella has said:
	"The government has set hospital trusts targets, in the process of trying to achieve these targets patient care has been compromised and standards have dropped drastically now making hospitals a dangerous place to be in. People are no longer afraid of going in to have treatment but what infections they might catch. Does the Minister not feel that is unacceptable"?
	The key question is: have lessons been learned? However, perhaps that could be prefaced by another question: do the Government know the extent of the problem, so that they can tackle properly the C. difficile problem? There is evidence of under-reporting; there is mandatory surveillance only of over-65s, so there is no obligation to report on under-65s.
	Let me refer the Minister to three examples on the C. difficile support website this week. There is an example of poor hygiene not from someone older than 65, but from a 23-year-old young man. He said that he suffered from ill health; he had suffered from Crohn's disease. He entered hospital and thought he
	"was in a clean environment ... I was suffering intense diarrhoea and reported it to the doctors and nurses that were looking after me. They told me it was nothing to worry about. A day or so later, when going to the toilet, I noticed excrement on the floor leading up to the toilets themselves. When I went into the toilet, there was...fecal matter all round the bowl and over the floor. I said to the staff about this, but it wasn't cleared up for a good few hours after I reported it. The following day I was feeling a lot worse. Nausea and severe stomach cramps along with dizzy spells made me realise that there was something seriously wrong.
	I tried telling the doctors about my concerns, but I felt as though they just guffawed at it ...The diarrhoea and vomiting had severely disrupted the electrolytes...in my blood, putting my heart under intense strain. My heart stopped and I had to be resuscitated.
	The doctors concluded that this was all due to an infection with a highly virulent strain of C.Diff.
	The ward I was on was closed as another 13 patients were affected by the bug".
	That is just one example among many of poor hygiene.
	I turn to an example of a lack of infection control, given by a 20-year old:
	"I was diagnosed with C.diff following a course of antibiotics that I took for an infected scar after a laparoscopy operation. I had a really dodgy tummy, then was admitted to hospital with life-threatening temperature, low blood pressure and high pulse. 24 hours later I was diagnosed with C.diff ... They got my temperature back up, and sent me home. Waiting at home for me was my Mum—she had just finished chemotherapy and was still susceptible to illness—so should they have sent me home? They kept me on a general ward"—
	not an isolated unit, a general ward—
	"whilst in hospital, and made no effort to stop the infection spreading to other patients."
	Here is an example of a lack of accurate information, which was posted on the website as recently as 10 January:
	"Brought my dad home from hospital yesterday ... Just looking through the copy of the discharge notes sent to the GP:
	'Mr. X has been well throughout his stay'.
	I can't believe there is no mention of catching C.diff, treatment given etc. The GP now has no idea that my dad has this bacterium."
	There are reports of patients being discharged from hospital before they are fit and ready to go home. This debate was also prompted by my experience over Christmas when visiting various residential homes. Sadly, I saw time and again residents who had recently been discharged from hospital who were malnourished and dehydrated; indeed, some were infected by the bug. Does the Minister therefore agree that all health care professionals, including those working in long-term care facilities, need to be made aware of the emergence of a stronger strain of C. difficile? Why are basic hygiene and the soap and water scrubbing that are so essential in tackling C. difficile not commonplace in hospitals?
	Dr. Stephen Fowlie, medical director of Nottingham University Hospitals NHS Trust, said the following of the recent outbreak at Nottingham City hospital:
	"Staff have to go back to the rather old-fashioned method of soap and water and that is a rather difficult message to get through".
	Why is this basic element of hygiene such a difficult message to get through?
	Have the Government taken heed of the recent outbreak at Nottingham's Queen's Medical Centre and joined in the good practice of setting up isolation wards away from short-stay surgical wards? Why, contrary to advice from the chief medical officer, is there inadequate control over the prescribing of high-risk broad spectrum antibiotics to over-65s? Why do we not in this instance—perhaps uniquely—learn a lesson from Europe and industrial launder nurses' uniforms, instead of continuing with our unique British practice of laundering uniforms at home?
	Will the Government, who are so intent on a target culture—national targets, combined targets and now local targets—agree with the memo from their own Department, which said that this is basically a cop-out? Will the Minister condemn trusts that, according to the memo, simply see C. difficile as an unavoidable fact of hospital life? What will be done to tackle the lack of information for patients and relatives once patients are infected? What precautions are communicated to discharged patients when they go home, in order to stop C. difficile spreading in the community, as it can do? It is not just a hospital problem—it is out there in the community. Will the Minister therefore agree that C. difficile is indeed endemic and needs to be tackled as an urgent priority, rather than simply handling targets better?

Andy Burnham: I congratulate the hon. Member for Enfield, Southgate (Mr. Burrowes) on securing the debate. He began by saying that it is an important subject, and he is absolutely right. I also pay tribute to the constituents he mentioned for the work that they have done in setting up the website. It is important that people have sources of information to which they can turn to find out more. I pay tribute to his constituents for using their personal tragedy to help others who may be affected by the condition.
	I also welcome the opportunity to put on the public record some information about Clostridium difficile that will help to aid our understanding of it. While I appreciate much of what the hon. Gentleman said and I do not wish to inject a note of party-political knockabout into the debate, it is important to understand that the vast majority of health service staff take these issues extremely seriously. They work to provide high standards of hygiene and a high quality of health care. They take concerns about C. difficile very seriously. That said, there is always more that can be done and I hope that in the course of this debate we can allude to some of those things and address this problem of concern to us all.
	Clostridium difficile infection is a hazardous complication of modern medical care. It usually affects vulnerable patients, particularly elderly patients with underlying illness for which they have been treated with antibiotics. Antibiotics are often lifesaving, but a side effect of antibiotic treatment on the intestine can be to allow the C. difficile organism to grow and produce toxins that cause diarrhoea, which can be very severe.
	It is not a new disease. It was identified as a complication of antibiotic treatment in the late 1970s. A major outbreak in Manchester in 1991-92 caused questions to be raised in this House and publication in 1994 of national guidance that is still appropriate.
	We were the first country to introduce national surveillance. That was initially through the voluntary reporting system of the Public Health Laboratory Service, now the Health Protection Agency. That showed increasing numbers of cases during the 1990s and led the Department of Health steering group on health associated infections to recommend the introduction of mandatory surveillance. That was implemented in 2004 and all trusts in England are required to report their cases to the HPA. The surveillance is based on the most vulnerable group of patients, those over 65 who account for about three quarters of all cases.
	From the following year, as part of this surveillance, all microbiology laboratories were asked to send isolates of the C. difficile bacteria via the HPA regional laboratories to the anaerobe reference laboratory in Cardiff for typing to identify the changing patterns of types circulating in England.
	Clostridium difficile infection became prominent in the press and media, and of public and political concern, with several severe outbreaks in 2005 caused by a new type of C. difficile—type 027. The most prominent outbreak, as the hon. Gentleman mentioned, was at Stoke Mandeville hospital and my right hon. Friend the Secretary of State for Health immediately asked the Healthcare Commission to investigate. Its report was published in July 2006 and made a number of recommendations, all of which were accepted by the Government and are being implemented in the NHS with support from the Department of Health.
	The hon. Gentleman raised questions about the Stoke Mandeville case and, indeed, the report made appalling reading. There can be no justification for some of the responses to the outbreak in that hospital, but that is not common across the system and I am confident that measures have been put in place since then to aid our understanding further and to reinforce the message that the safety of patients comes before anything else in the hospital environment. I am happy to place that message again on the record this evening for the avoidance of any doubt.

Andy Burnham: The hon. Gentleman will be aware that the Health Act 2006 introduced a new code of practice for cleanliness and hygiene. It requires acute trusts and PCTs to share information on infections when patients are transferred between health care settings. That should be the basic good practice to be followed by all the bodies involved, and he is right to raise the matter in this debate.
	The hon. Member for Enfield, Southgate also asked about isolation facilities. Obviously, hospital trusts have to manage on their existing resources, but the Government have made capital available to the NHS in this financial year for the purpose of making modest improvements to the ward environment. Those improvements may include the provision of extra isolation facilities, where they are deemed necessary for the control of infection.

Andy Burnham: My hon. Friend raises an important point. I pay tribute to him for the work that he is doing on this matter, which I know that he raised in the House last week. Where C. difficile is known to have contributed to a person's death, that is indeed recorded, as it helps us to understand the extent of the problem caused by the infection. Over time, we can produce a pattern that will help us to understand the effects of the disease.
	The House may be interested in some figures regarding cases of C. difficile. As I said, mandatory reporting was introduced in 2004. In 2005, 51,690 cases were reported, an increase of 17.2 per cent. on the previous year. In many ways, the problem has been exposed by the mandatory reporting system that we have put in place. The Department has responded quickly to those figures and taken a series of measures that will help in bearing down on the problem. Moreover, although I accept that the hon. Member for Enfield, Southgate may be able to give examples of failings in respect of C. difficile, in the vast majority of cases, the quality of care provided by staff, and the importance that they place on the matter, cannot be faulted.
	I shall outline some of the actions the Government have taken. In response to the outbreak in 2005, a professional letter from the chief medical officer and the chief nursing officer was issued in December 2005 to all NHS trusts and foundation trusts in England. It reminded trusts of the surveillance requirements and of the key actions required for prevention and control of the C. difficile infection, and referred them to the existing 1994 guidance. The Department of Health has asked the Health Protection Agency to convene an expert group to review and update the guidance, and its draft recommendations are expected by April 2007. I hope that it will be some comfort to the hon. Member for Enfield, Southgate to learn that action is in hand to keep on top of the issue. Preliminary indications are that the basic elements of the existing guidance are sound.
	To strengthen clinical practice in C. difficile control, in May 2006 a seventh high impact intervention aimed specifically at C. difficile infection was added to the saving lives toolkit that had been launched in June 2005. That has been widely promoted throughout the NHS.
	Following the Healthcare Commission report and the publication of the surveillance data showing more than 50,000 cases reported from trusts in England in 2005, a further professional letter was issued in 2006 by the chief medical officer, the chief nursing officer, the chief pharmacist officer and the chief executive of the NHS, amplifying the policies and clinical practices that need to be implemented to control C. difficile. They included the following: first, the need for an antibiotic prescribing policy to control the use of broad spectrum antibiotics to prevent their overuse and to limit the length of time for which intravenous antibiotics are prescribed; secondly, ensuring that all trusts have prompt access to laboratory diagnosis of C. difficile infection seven days a week, so that tests can be done within 18 hours of the onset of symptoms or the admission of a symptomatic patient; thirdly, ensuring prompt isolation, segregation or cohort nursing of all patients diagnosed with the infection; and, fourthly, enhancing infection control procedures, with rigorous hand washing after each contact with a patient with a C. difficile infection. I think that picks up the point made by the hon. Member for Enfield, Southgate, but it cannot be emphasised too much that those basic procedures must be followed. Finally, there will be enhanced environmental cleaning and decontamination to remove the C. difficile spores that survive for a prolonged time in the environment after being shed by patients with diarrhoea.
	At the same time, trusts were told that the NHS operating framework for 2007-08 and the NHS contract would set out the requirements for primary care trusts to agree a local target with their acute hospital providers for a significant reduction in C. difficile infections. The scale of the target would be determined by the level of C. difficile infection currently in the trust. I urge my hon. Friend the Member for Loughborough (Mr. Reed) to talk to his PCT and his main acute trust to find out exactly how ambitiously they are setting that target. I welcome the intervention of his local newspaper in raising awareness of the issue; it should be locally driven, with locally set targets to bear down on the problems that he is experiencing in his area.
	Guidance is also embodied in the code of practice on hygiene and health care associated infection, which came into force under the Health Act 2006 in October last year. The code requires all NHS bodies to implement appropriate policies for prevention and control of the infection. Compliance with the code will be assessed by the Healthcare Commission as part of the annual health check and I want to stress the fact that the commission will issue improvement notices under the Act when it finds trusts that are not complying with its requirements. We are encouraging the commission to consider that further measure when there is evidence of failure to comply with basic standards.
	To help trusts make the necessary physical improvements to the patient environment to help to prevent and control infection, the December 2006 professional letter announced the launch of a £50 million challenge fund to which all trusts could apply for capital funding to make the relatively small scale improvements to their physical environment that will enhance their ability to control C. difficile and other health care associated infections. I can update the House. There has been an encouraging response to the invitation to apply to that fund; a number of applications have been received and I believe that that will result in targeted, localised improvements in NHS trusts up and down the country to help trusts get a grip on the issues.
	To conclude, C. difficile infection is a serious problem in the NHS because of our success in treating a range of serious illnesses and in increasing the life expectancy of the population. That creates a greater number of patients more vulnerable to the infection. Nevertheless, the infection is also a result of insufficient attention to proper preventive measures. It requires rigorous implementation of hygiene and infection control measures and vigilance in the application of prudent antibiotic policies. All of that is included in the Government strategy for the control of health care associated infections and will be enforced through the code of practice.
	I believe that we know what measures will, taken together, make a difference in this area. What we want to see is the issue gripped from the top of health care organisations to ensure that the necessary measures are implemented and that problems are kept under close scrutiny. More regular reporting of C. difficile data is required, so that we can keep a closer track on problems that trusts may be experiencing. Local Members should discuss these matters with their local trusts in their local areas, as that sort of combined approach will help us all to get a grip on the problem in every locality.
	I congratulate the hon. Gentleman again on securing this debate. I hope that it will contribute to improving public awareness of what he is right to identify as a very important topic.
	 Question put and agreed to.
	 Adjourned accordingly at twenty-nine minutes to Eleven o'clock.